Analyzing Debt Terms, Yields, Prices, and Credit Ratings

Analyzing Debt Terms, Yields, Prices, and Credit RatingsReproduced below is the debt footnote from the 2013 10-K report of Dell Inc.

Analyzing Debt Terms, Yields, Prices, and Credit Ratings

Reproduced below is the debt footnote from the 2013 10-K report of Dell Inc.


Long-Term Debt (in millions)
February 1,
2013
February 3,
2012
Senior Notes
$400 million issued on June 10, 2009, at 3.375% due June 2012 (“2012 Notes”) $ — $ 400
$600 million issued on April 17, 2008, at 4.70% due April 2013 (“2013A Notes”) 601 605
$500 million issued on September 7, 2010, at 1.40% due September 2013 500 499
$500 million issued on April 1, 2009, at 5.625% due April 2014(b) 500 500
$300 million issued on March 28, 2011, with a floating rate due April 2014 (“2014B Notes”) 300 300
$400 million issued on March 28, 2011, at 2.10% due April 2014 400 400
$700 million issued on September 7, 2010, at 2.30% due September 2015(b) 702 701
$400 million issued on March 28, 2011, at 3.10% due April 2016(b) 402 401
$500 million issued on April 17, 2008, at 5.65% due April 2018(b) 502 501
$600 million issued on June 10, 2009, at 5.875% due June 2019(b) 604 602
$400 million issued on March 28, 2011, at 4.625% due April 2021 398 398
$400 million issued on April 17, 2008, at 6.50% due April 2038 400 400
$300 million issued on September 7, 2010, at 5.40% due September 2040 300 300
Senior Debentures
$300 million issued on April 3, 1998, at 7.10% due April 2028 (“Senior Debentures”)(a) 379 384
Other
Long-term structured financing debt 872 920
Less: current portion of long-term debt (1,618) (924)
Total long-term debt 5,242* 6,387
Short-Term Debt
Commercial paper 1,807 1,500
Short-term structured financing debt 416 440
Current portion of long-term debt 1,618 924
Other 2 3
Total short-term debt 3,843 2,867
Total debt $ 9,085 $ 9,254

*Reflects carrying value (net book value) of debt.

Aggregate future maturities of long-term debt at face value were as follows at February 1, 2013:

  Maturities by Fiscal Year
(in millions) 2014 2015 2016 2017 2018 Thereafter Total
Aggregate future maturities              
of long-term debt outstanding $ 1,617 $ 1,465 $ 790 $ 400 $ — $ 2,500 $ 6,722**

**Reflects face value of debt.

Reproduced below is a summary of the market values as of November 2013 of the Dell bonds maturing from 2021 to 2040 (from Morningstar, quicktake.morningstar.com).


Name
Maturity
Date

Amount $

Price

Coupon %
Yield to
Maturity %
Dell 5.4% 9/10/2040 300 69.50 5.4 8.24
Dell 6.5% 4/15/2038 400 77.30 6.5 8.77
Dell 4.625% 4/1/2021 400 91.50 4.625 6.07

(a) What is the amount of long-term debt reported on Dell’s February 1, 2013 balance sheet?
$Answer 5242 million

What are the scheduled maturities for this indebtedness?

2014 $Answer 1617

 

million
2015 $Answer 1465

 

million
2016 $Answer 790

 

million
2017 $ Answer 400

 

million
2018 $Answer 0

 

million
Thereafter $Answer 2500

 

million

 

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