Analyzing Debt Terms Assignment | Top Universities

Analyzing Debt Terms, Yields, Prices, and Credit Ratings
Reproduced below is the debt footnote from the 2011 10-K report of Dell Inc.

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January 28, January 29,
Long-Term Debt (in millions) 2011 2010
$400 million issued on June 10, 2009, at 3.375% due June 2012 $ 400 $ 401
$600 million issued on April 17, 2008, at 4.70% due April 2013 609 599
$500 million issued on September 7, 2010, at 1.40% due September 2013 499
$500 million issued on April 1, 2009, at 5.625% due April 2014 500 500
$700 million issued on September 7, 2010, at 2.30% due September 2015 700
$500 million issued on April 17, 2008, at 5.65% due April 2018 499 499
$600 million issued on June 10, 2009, at 5.875% due June 2019 600 600
$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
Senior Debentures
$300 million issued on April 3, 1998 at 7.10% due April 2028 389 394
India term loan: entered into on October 15, 2009 at 8.9% due October 2011 24
Structured financing debt $ 250 $ —
Total long-term debt $ 5,146 $ 3,417
Short-Term Debt
Commercial paper 496
Structured financing debt 850 164
Other 1 3
Total short-term debt 851 663
Total debt $ 5,997 $ 4,080

Aggregate future maturities of long-term debt at face value were as follows at January 28, 2011:

(in millions) Maturities by Fiscal Year
2012 2013 2014 2015 2016 Thereafter Total
Aggregate future maturities of long-term debt outstanding $ — $ 595 $ 1,155 $ 500 $ 700 $ 2,100 $ 5,050

There is an $86 difference between the total referenced in this table and the $5,146 referenced for long-term debt in the table above. The difference arises because the maturity table reports
the face value of the debt $(5,050). The first table above reports the carrying value (net book value) of the debt. Many of the notes are not carried at par. The largest difference is the senior
debentures that have a premium of $89 (in millions).



Reproduced below is a summary of the market values 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 94.8 5.4 5.77
Dell 6.5% 4/15/2038 400 111.9 6.5 5.63
Dell 4.625% 4/1/2021 400 104.9 4.625 4.01

(a) What is the amount of long-term debt reported on Dell’s January 28, 2011, balance sheet?

What are the scheduled maturities for this indebtedness? Year ($ millions)


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