Financing Arrangements

Current debt obligations consisted of the following:



(in millions)	April 28, 2017		April 29, 2016
Bank borrowings	$	396	$	387
Capital lease obligations	5		106
Commercial paper	901		—
Three-year term loan	3,000		—
6.000 percent ten-year 2008 CIFSA senior notes	1,150		—
1.500 percent three-year 2015 senior notes	1,000		—
1.375 percent five-year 2013 senior notes	1,000		—
3.500 percent seven-year 2010 HTWR senior notes	42		—
Floating rate three-year 2014 senior notes	—		250
0.875 percent three-year 2014 senior notes	—		250
Debt premium, net	26		—
Current debt obligations	$	7,520	$	993

Commercial Paper On January 26, 2015, Medtronic Global Holdings S.C.A. (Medtronic Luxco), an entity organized under the laws of Luxembourg, entered into various agreements pursuant to which Medtronic Luxco may issue unsecured commercial paper notes (the 2015 Commercial Paper Program) on a private placement basis up to a maximum aggregate amount outstanding at any time of $3.5 billion. The Company and Medtronic, Inc. have guaranteed the obligations of Medtronic Luxco under the 2015 Commercial Paper Program. At April 28, 2017, the Company had $901 million of commercial paper outstanding. No amount of commercial paper was outstanding at April 29, 2016.

During fiscal years 2017 and 2016, the weighted average original maturity of the commercial paper outstanding was approximately 39 days and 49 days, respectively, and the weighted average interest rate was 0.89 percent and 0.57 percent, respectively. The issuance of commercial paper reduces the amount of credit available under the Company's existing line of credit.

Bank Borrowings Outstanding bank borrowings at April 28, 2017 were short-term advances to certain non-U.S. subsidiaries under credit agreements with various banks. Bank borrowings consist primarily of borrowings in Japanese Yen at interest rates ranging from 0.17% to 0.18%, and the borrowing is a natural hedge of currency and exchange rate risk.

Line of Credit The Company has a $3.5 billion five year revolving syndicated line of credit facility ($3.5 Billion Revolving Credit Facility), by and among Medtronic, Medtronic, Inc., Medtronic Luxco, the lenders from time to time party thereto and Bank of America, N.A., as administrative agent and issuing bank, which expires in January 2020. The $3.5 Billion Revolving Credit Facility provides the Company with the ability to increase its borrowing capacity by an additional $500 million at any time during the term of the agreement. At each anniversary date of the $3.5 Billion Revolving Credit Facility, but not more than twice prior to the maturity date, the Company could also request a one-year extension of the maturity date. The Company, Medtronic Luxco, and Medtronic, Inc. guarantee the obligations under the Amended and Restated Revolving Credit Agreement. At April 28, 2017 and April 29, 2016, no amounts were outstanding on the committed line of credit.

Interest rates on advances on the Credit Facility are determined by a pricing matrix, based on the Company’s long-term debt ratings, assigned by Standard & Poor’s Ratings Services and Moody’s Investors Service. Facility fees are payable on the Credit Facility and are determined in the same manner as the interest rates. The agreements also contain customary covenants, all of which the Company remained in compliance with at April 28, 2017.

Long-term debt consisted of the following:



		April 28, 2017					April 29, 2016
(in millions, except interest rates)	Maturity by Fiscal Year	Payable			Effective Interest Rate		Payable			Effective Interest Rate
6.000 percent ten-year 2008 CIFSA senior notes	2018	$	—		1.41	%	$	1,150		1.41	%
1.375 percent five-year 2013 senior notes	2018	—			1.41		1,000			1.41
1.500 percent three-year 2015 senior notes	2018	—			1.59		1,000			1.59
5.600 percent ten-year 2009 senior notes	2019	400			5.61		400			5.61
1.700 percent two-year 2017 senior notes	2019	1,000			1.74		—			—
4.450 percent ten-year 2010 senior notes	2020	766			4.47		766			4.47
2.500 percent five-year 2015 senior notes	2020	2,500			2.52		2,500			2.52
Floating rate five-year 2015 senior notes	2020	500			1.98		500			1.04
4.200 percent ten-year 2010 CIFSA senior notes	2021	600			2.22		600			2.22
4.125 percent ten-year 2011 senior notes	2021	500			4.19		500			4.19
3.125 percent ten-year 2012 senior notes	2022	675			3.16		675			3.16
3.150 percent seven-year 2015 senior notes	2022	2,500			3.18		2,500			3.18
3.200 percent ten-year 2012 CIFSA senior notes	2023	650			2.66		650			2.66
2.750 percent ten-year 2013 senior notes	2023	530			2.78		530			2.78
2.950 percent ten-year 2013 CIFSA senior notes	2024	310			2.67		310			2.67
3.625 percent ten-year 2014 senior notes	2024	850			3.65		850			3.65
3.500 percent ten-year 2015 senior notes	2025	4,000			3.61		4,000			3.61
3.350 percent ten-year 2017 senior notes	2027	850			3.35		—			—
4.375 percent twenty-year 2015 senior notes	2035	2,382			4.44		2,382			4.44
6.550 percent thirty-year 2007 CIFSA senior notes	2038	374			3.75		374			3.75
6.500 percent thirty-year 2009 senior notes	2039	300			6.52		300			6.52
5.550 percent thirty-year 2010 senior notes	2040	500			5.56		500			5.56
4.500 percent thirty-year 2012 senior notes	2042	400			4.51		400			4.51
4.000 percent thirty-year 2013 senior notes	2043	325			4.12		325			4.12
4.625 percent thirty-year 2014 senior notes	2044	650			4.67		650			4.67
4.625 percent thirty-year 2015 senior notes	2045	4,150			4.62		4,000			4.64
Three-year term loan	2018	—			—		3,000			1.12
Interest rate swaps	2021-2022	40			—		89			—
Capital lease obligations	2019-2025	23			4.81		26			4.66
Bank borrowings	2019-2022	139			1.28		56			6.46
Debt premium, net	2019-2045	135			—		214			—
Deferred financing costs	2019-2045	(128		)	—		(138		)	—
Long-term debt		$	25,921				$	30,109

Senior Notes The Company had outstanding unsecured senior obligations, including those described as senior notes in the long-term debt table above (collectively, the Senior Notes). The Senior Notes rank equally with all other unsecured and unsubordinated indebtedness of the Company. The indentures under which the Senior Notes were issued contain customary covenants, all of which the Company remained in compliance with at April 28, 2017. The Company used the net proceeds from the sale of the Senior Notes primarily for general corporate purposes, which includes the repayment of other indebtedness of the Company.

In March 2017, Medtronic Luxco issued two tranches of Senior Notes with an aggregate face value of $1.850 billion (collectively, the 2017 Senior Notes). The first tranche consisted of $1.0 billion of 1.700 percent Senior Notes due 2019. The second tranche consisted of $850 million of 3.350 percent Senior Notes due 2027. Concurrent with the offering by Medtronic Luxco, Medtronic, Inc. issued $150 million in principal amount of its 4.625 percent Senior Notes due 2045 (the Reopening Notes). The Reopening Notes are a further issuance of, and form a single series with, the $4.0 billion principal amount of Medtronic, Inc.'s previously outstanding 4.625 percent Senior Notes due 2045. Interest on the 2017 Senior Notes and the Reopening Notes is payable semi-annually. The Company used the net proceeds from the sale of the 2017 Senior Notes and the Reopening Notes for general corporate purposes.

In April 2016, the Company completed a cash tender offer and redemption of $2.7 billion of senior notes for $3.0 billion of total consideration. We recognized a loss on debt extinguishment of $163 million, which included cash premiums and accelerated amortization of deferred financing costs and debt discounts and premiums. The loss on debt extinguishment was recognized in interest expense, net in the consolidated statements of income. In addition to the loss on debt extinguishment, we recognized $20 million of interest expense due to the acceleration of net losses on forward starting interest rate derivatives, which were terminated at the time of original debt issuances relating to the portion of debt extinguished in the tender offer.

At April 28, 2017 and April 29, 2016, the Company had interest rate swap agreements designated as fair value hedges of certain underlying fixed-rate obligations, including the Company’s $500 million 4.125 percent 2011 Senior Notes and $675 million 3.125 percent 2012 Senior Notes. Refer to Note 9 for additional information regarding the interest rate swap agreements.

Term Loan On January 26, 2015, Medtronic, Inc. borrowed $3.0 billion for a term of three years under a senior unsecured term loan credit agreement (the “Term Loan Credit Agreement”), among Medtronic, Inc., Medtronic, Medtronic Luxco, the lenders from time to time party thereto and Bank of America, N.A., as administrative agent. The Term Loan Credit Agreement was entered into to finance, in part, the cash component of the acquisition of Covidien and certain transaction expenses. Medtronic and Medtronic Luxco have guaranteed the obligations of Medtronic, Inc. under the Term Loan Credit Agreement.

Contractual maturities of debt for the next five fiscal years and thereafter, excluding deferred financing costs, debt premium, net, and the fair value of outstanding interest rate swap agreements are as follows:



(in millions)
2018	$	7,494
2019	1,403
2020	3,778
2021	1,127
2022	3,276
Thereafter	16,290
Total debt	33,368
Less: Current portion of debt	7,494
Long-term portion of debt	$	25,874

Financial Instruments Not Measured at Fair Value

At April 28, 2017, the estimated fair value of the Company’s Senior Notes, including the current portion, was $30.4 billion compared to a principal value of $28.9 billion. At April 29, 2016 the estimated fair value was $29.8 billion compared to a principal value of $27.4 billion. Fair value was estimated using quoted market prices for the publicly registered senior notes, classified as Level 2 within the fair value hierarchy. The fair values and principal values consider the terms of the related debt and exclude the impacts of debt discounts and derivative/hedging activity.