Notes to Consolidated Financial Statements| Notes to Consolidated Financial Statements | |
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Note F - Notes Payable Notes payable consisted of the following.
Commercial Paper and Backup Credit Facilities As of February 28, 2001, CHL, the Company's mortgage banking subsidiary, had unsecured credit agreements (revolving credit facilities) with consortiums of commercial banks permitting CHL to borrow an aggregate maximum amount of $5.3 billion. The facilities included a $4.3 billion revolving credit facility with forty-two commercial banks consisting of: (i) a five-year facility of $3.0 billion, which expires on September 24, 2002; and (ii) a one-year facility of $1.3 billion, which expires on September 19, 2001. As consideration for the facility, CHL pays annual commitment fees of $3.8 million. There is an additional one-year facility, which expires April 11, 2001, with thirteen of the forty-two banks referenced above for total commitments of $1.0 billion. As consideration for the facility, CHL pays annual commitment fees of $0.8 million. CHL has renewed this facility. (See Note Q - "Subsequent Events") The purpose of these credit facilities is to provide liquidity backup for CHL's commercial paper program. No amount was outstanding under these revolving credit facilities at February 28, 2001. The weighted average borrowing rate on commercial paper borrowings for the year ended February 28, 2001 was 6.40%. In addition, CHL has entered into a $1.1 billion asset-backed commercial paper conduit facility with four commercial banks. This facility has a maturity date of November 20, 2001. As consideration for this facility, CHL pays annual commitment fees of $1.4 million. Loans made under this facility are secured by conforming and non-conforming mortgage loans. All of the facilities contain various financial covenants and restrictions, certain of which limit the amount of dividends that can be paid by the Company or CHL. Medium-Term Notes As of February 28, 2001, outstanding medium-term notes issued by CHL under various shelf registrations filed with the Securities and Exchange Commission or issued by CHL pursuant to its Euro medium-term note program were as follows.
As of February 28, 2001 substantially all of the outstanding fixed-rate notes had been effectively converted through interest rate swap agreements to floating-rate notes. The weighted average rate on medium-term notes for the year ended February 28, 2001, including the effect of the interest rate swap agreements, was 6.95%. As of February 28, 2001 $1,511 million foreign currency-denominated medium-term notes were outstanding. Such notes are denominated in Deutsche Marks, French Francs, Portuguese Escudos and Euros. The Company manages the associated foreign currency risk by entering into currency swaps. The terms of the currency swaps effectively translate the foreign currency denominated medium-term notes into U.S. dollars. Convertible Debentures
During the year ended February 28, 2001, the Company received $500 million from the issuance of zero coupon Liquid Yield Option Notes ("LYONs") with a face value of $675 million at maturity of LYONs due February 8, 2031. The LYONs were issued at $741.37 per LYON. At maturity, February 8, 2031, a holder will receive $1,000 per LYON. The issue price of each LYON represents a yield to maturity of 1.0%. The LYONs are senior indebtedness of the Company.
The Company may pay the purchase price in cash, common stock or a combination thereof. Beginning on February 8, 2006 and on any date thereafter, the Company may redeem the LYONs at the original issue price plus accrued original issue discount. Holders of LYONs may surrender LYONs for conversion into 11.57 shares of the Company's common stock per LYON in any calendar quarter, if, as of the last day of the preceding calendar quarter, the closing sale price of the Company's common stock for at least 20 trading days in a period of 30 consecutive trading days ending on the last trading day of such preceding calendar quarter is more than a specified percentage, beginning at 135% and declining 0.21% per quarter thereafter, of the accreted conversion price per share of common stock on the last day of trading of such preceding calendar quarter. The accreted conversion price per share is equal to the original issue price of a LYON plus the accrued original issue discount, with that sum divided by the number of shares issuable upon a conversion of a LYON. Holders may also surrender a LYON for conversion during any period in which the credit rating assigned to the LYONs by either Moody's or Standard & Poor's falls below an investment grade level. Subordinated Notes As of February 28, 2001, CHL had $200 million of 8.25% subordinated notes (the "Subordinated Notes") due July 15, 2002. Interest on the Subordinated Notes is payable semi-annually on each January 15 and July 15. The Subordinated Notes are not redeemable prior to maturity and are not subject to any sinking fund. Pre-Sale Funding Facilities
As of February 28, 2001, CHL had uncommitted revolving credit facilities that are secured by conforming mortgage loans which are in the process of being pooled into MBS. As of February 28, 2001, the Company had no outstanding borrowings under any of these facilities. Maturities of notes payable are as follows.
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