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Debt obligations
 9 Months Ended
Sep. 30, 2019
Debt obligations
NOTE 11 –
 
Debt obligations:
a. Short-term debt:
 
                                 
 
Weighted average
 
interest rate as of

September 30, 2019
   
Maturity
   
September 30,
2019
   
December
 
31,

2018
 
 
   
   
(U.S. $ in millions)
 
Bank and financial institutions
   
—
 
    
—  
     $
—  
    $
2
 
Revolving Credit Facility
 
 
LIBOR+1.6
%
 
 
—
 
 
 
 
 
100
 
 
 
—
 
 
 
Convertible debentures
   
0.25
 %    
2026
     
514
     
514
 
Current maturities of long-term liabilities
   
2,516
     
1,700
 
                 
Total short-term debt
  $
3,130
    $
2,216
 
                 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt:
 
                                 
 
Weighted average interest
rate as of September 30,
 
2019
    
Maturity
   
September 30,
2019
   
December 31,
2018
 
 
   
   
(U.S. $ in millions)
 
Senior notes EUR 1,660 million
   
0.38%
     
2020
    $
1,816
    $
1,897
 
Senior notes EUR 1,500 million
   
1.13
%
      
2024
     
1,633
     
1,707
 
Senior notes EUR 1,300 million
   
1.25%
     
2023
     
1,416
     
1,480
 
Senior notes EUR 900 million
   
4.50%
     
2025
     
985
     
1,029
 
Senior notes EUR 750 million
   
1.63%
     
2028
     
814
     
850
 
Senior notes EUR 700 million
   
3.25%
     
2022
     
766
     
801
 
Senior notes EUR 700 million
   
1.88%
     
2027
     
764
     
798
 
Senior notes USD 3,500 million
   
3.15%
     
2026
     
3,494
     
3,493
 
Senior notes USD 3,000 million
   
2.20%
     
2021
     
2,998
     
2,997
 
Senior notes USD 3,000 million
   
2.80%
     
2023
     
2,994
     
2,993
 
Senior notes USD 1,556 million (1)
   
1.70%
     
2019
     
—  
     
1,700
 
Senior notes USD 2,000 million
   
4.10%
     
2046
     
1,985
     
1,985
 
Senior notes USD 1,250 million
   
6.00%
     
2024
     
1,250
     
1,250
 
Senior notes USD 1,250 million
   
6.75%
     
2028
     
1,250
     
1,250
 
Senior notes USD 844 million
   
2.95%
     
2022
     
857
     
860
 
Senior notes USD 789 million
   
6.15%
     
2036
     
782
     
782
 
Senior notes USD 700 million
   
2.25%
     
2020
     
700
     
700
 
Senior notes USD 613 million
   
3.65%
     
2021
     
619
     
621
 
Senior notes USD 588 million
   
3.65%
     
2021
     
587
     
587
 
Senior notes CHF 350 million
   
0.50%
     
2022
     
354
     
356
 
Senior notes CHF 350 million
   
1.00%
     
2025
     
354
     
356
 
Fair value hedge accounting adjustments
   
 
      
     
—  
     
(9
 )
Total senior notes
   
26,417
     
28,483
 
Other long-term debt
   
0.96%
      
2026
     
1
     
12
 
Less current maturities
   
(2,516
 )    
(1,700
 )
Derivative instruments
   
—  
      
9
 
Less debt issuance costs
   
(89
 )    
(104
 )
Total senior notes and loans
  $
23,812
    $
26,700
 
                 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) During the first six months of 2019, Teva repurchased and canceled approximately $
144
 million principal amount of its $
1,700
 million
1.7
% senior notes due in July 2019. In July 2019, Teva repaid at maturity $
1,556
 million of its
1.7
% senior notes.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt was issued by several indirect wholly-owned subsidiaries of the Company and is fully and unconditionally guaranteed by the Company as to payment of all principal, interest, discount and additional amounts, if any.
Long-term debt as of September 30, 2019 is effectively denominated (taking into consideration cross currency swap agreements) in the following currencies: U.S. dollar 68%, euro 29% and Swiss franc 3%.
Teva’s principal sources of short-term liquidity are its cash on hand, existing cash investments, liquid securities and available credit facilities, primarily its $2.3 billion revolving credit facility (“RCF”).
In April 2019, the Company entered into a $2.3 billion unsecured syndicated RCF, which replaced the previous $3 billion revolving credit facility. The RCF contains certain covenants, including certain limitations on incurring liens and indebtedness and maintenance of certain financial ratios, including the requirement to maintain compliance with a net debt to EBITDA ratio, which becomes more restrictive over time. The net debt to EBITDA ratio limit is 6.25x through December 31, 2019, gradually declines to 5.75x in the third and fourth quarters of 2020, and continues to gradually decline over the remaining term of the RCF.
 
The RCF can be used for general corporate purposes, including repaying existing debt. As of September 30, 2019,
 $100 million was outstanding under the RCF. As of the date of this
quarterly​​​​​​​ 
report
 
on Form 10-Q
,
no amounts
a
re outstanding under the RCF. Based on current and forecasted results, the Company expects that it will not exceed the financial covenant thresholds set forth in the RCF within one year from the date these financial statements are issued.
 
Under specified circumstances, including
non-compliance
with any of the covenants described above and the unavailability ​​​​​​​of any waiver, amendment or other modification thereto, the Company will not be able to borrow under the RCF. Additionally, violations of the covenants, under the above-mentioned circumstances, would result in an event of default in all borrowings under the RCF and, when greater than a specified threshold amount as set forth in each series of senior notes is outstanding, could lead to an event of default under the Company’s senior notes due to cross acceleration provisions.
Teva expects that it will continue to have sufficient cash resources to support its debt service payments and all other financial obligations within one year from the date that these financial statements are issued.