cisco-annual-report-2021

Borrowings
Senior Notes The following table summarizes the principal amount of our senior notes (in millions):
Maturity Date July 31, 2021 July 25, 2020
Senior notes:
Fixed-rate notes:
2.20% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . February 28, 2021 $ — $ 2,500
2.90% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 4, 2021 — 500
1.85% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . September 20, 2021 2,000 2,000
3.00% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 15, 2022 500 500
2.60% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . February 28, 2023 500 500
2.20% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . September 20, 2023 750 750
3.625% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 4, 2024 1,000 1,000
3.50% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 15, 2025 500 500
2.95% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . February 28, 2026 750 750
2.50% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . September 20, 2026 1,500 1,500
5.90% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . February 15, 2039 2,000 2,000
5.50% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . January 15, 2040 2,000 2,000
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,500 $ 14,500
Interest is payable semiannually on each class of the senior fixed-rate notes, each of which is redeemable by us at any time,
subject to a make-whole premium. We were in compliance with all debt covenants as of July 31, 2021.
Our $2.0 billion senior fixed-rate notes with a maturity date of September 20, 2021 were redeemed on August 20, 2021, pursuant
to our par call redemption option. The redemption price was equal to 100% of the principal amount plus any accrued and unpaid
interest to, but excluding, August 20, 2021.
Commercial Paper We have a short-term debt financing program in which up to $10.0 billion is available through the issuance
of commercial paper notes. We use the proceeds from the issuance of commercial paper notes for general corporate purposes.
We had no commercial paper outstanding as of July 31, 2021 and July 25, 2020.
Credit Facility On May 13, 2021, we entered into a 5-year credit agreement with certain institutional lenders that provides for a
$3.0 billion unsecured revolving credit facility that is scheduled to expire on May 13, 2026. The credit agreement is structured
as an amendment and restatement of our 364-day credit agreement which would have terminated on May 14, 2021. As of July
31, 2021, we were in compliance with the required interest coverage ratio and the other covenants, and we had not borrowed any
funds under the credit agreement. Any advances under the 5-year credit agreement will accrue interest at rates that are equal
to, based on certain conditions, either (a) with respect to loans in U.S. dollars, (i) LIBOR or (ii) the Base Rate (to be defined as
the highest of (x) the Bank of America prime rate, (y) the Federal Funds rate plus 0.50% and (z) a daily rate equal to one-month
LIBOR plus 1.0%), (b) with respect to loans in Euros, EURIBOR, (c) with respect to loans in Yen, TIBOR and (d) with respect
to loans in Pounds Sterling, SONIA plus a credit spread adjustment, plus a margin that is based on our senior debt credit ratings
as published by Standard & Poor’s Financial Services, LLC and Moody’s Investors Service, Inc., provided that in no event will
the interest rate be less than 0.0%. We will pay a quarterly commitment fee during the term of the 5-year credit agreement
which may vary depending on our senior debt credit ratings. In addition, the 5-year credit agreement incorporates certain
sustainability-linked metrics. Specifically, our applicable interest rate and commitment fee are subject to upward or downward
adjustments if we achieve, or fail to achieve, certain specified targets based on two key performance indicator metrics: (i) social
impact and (ii) foam reduction. We may also, upon the agreement of either the then-existing lenders or additional lenders not
currently parties to the agreement, increase the commitments under the credit facility by up to an additional $2.0 billion and,
at our option, extend the maturity of the facility for an additional year up to two times. The credit agreement requires that we
comply with certain covenants, including that we maintain an interest coverage ratio as defined in the agreement.
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