Debt and Borrowing Arrangements |
9 Months Ended | ||||||||
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Sep. 30, 2011 | |||||||||
| Debt and borrowing arrangements | |||||||||
| Debt and Borrowing Arrangements |
Debt and Borrowing Arrangements
During the three months ended September 30, 2011, the Company issued $2,979 million of long-term debt, of which $979 million was exchanged for $1,022 million of existing long-term debt plus a premium of $208 million. The existing long-term debt was assumed in connection with our acquisition of CCE's North American business in the fourth quarter of 2010. The remaining cash from the issuance was used to reduce the Company's outstanding commercial paper balance and exchange a certain amount of short-term debt. The Company recorded a charge of $5 million in the line item interest expense during the three months ended September 30, 2011, primarily due to transaction costs associated with the exchange of long-term debt.
The general terms of the notes issued during the three months ended September 30, 2011, are as follows:
In addition, the Company repurchased long-term debt during the three months ended September 30, 2011, that we assumed in connection with our acquisition of CCE's North American business. The repurchased debt had a carrying value of $19 million and included $5 million in unamortized fair value adjustments recorded as part of our purchase accounting. The Company recorded a nominal net gain in the line item interest expense during the three months ended September 30, 2011, primarily due to the change in fair value from the date we assumed the CCE debt until the date it was repurchased.
The Company also repurchased long-term debt during the second quarter of 2011 that was assumed in connection with our acquisition of CCE's North American business. The repurchased debt had a carrying value of $42 million, which included $12 million in unamortized fair value adjustments recorded as part of our purchase accounting. The Company recorded a net gain of $1 million in the line item interest expense during the second quarter of 2011, primarily due to the change in fair value from the date we assumed the debt until the date it was repurchased.
During the first quarter of 2011, the Company repurchased all of our outstanding U.K. pound sterling notes due in 2016 and 2021. We assumed this debt in connection with our acquisition of CCE's North American business. The repurchased debt had a carrying value of $674 million on the settlement date, which included $106 million in unamortized fair value adjustments recorded as part of our purchase accounting. The Company recorded a net charge of $4 million in the line item interest expense during the first quarter of 2011, primarily due to the change in fair value from the date we assumed the debt until the date it was repurchased, in addition to premiums paid to repurchase the debt.
As of September 30, 2011, the carrying value of the Company's long-term debt included $767 million of fair value adjustments related to the debt assumed from CCE. These fair value adjustments will be amortized over a weighted-average period of approximately 16 years, which is equal to the weighted-average maturity of the assumed debt to which these fair value adjustments relate. The amortization of these fair value adjustments will be a reduction of interest expense in future periods, which will typically result in our interest expense being less than the actual interest paid to service the debt.
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