To: Skeeter Bug who wrote (71061 ) 11/28/1999 1:48:00 PM From: Chuzzlewit Respond to
Skeeter, you really should get into the habit of reading 10-Ks before shooting from the hip. Here is the company's explanation of the debt offering, excerpted from Dell's last 10-K:LONG-TERM DEBT AND INTEREST RATE RISK MANAGEMENT Concurrent with the issuance of the Senior Notes and Senior Debentures, the Company entered into interest rate swap agreements converting the Company's interest rate exposure from a fixed rate to a floating rate basis to better align the associated interest rate characteristics to its cash and marketable securities portfolio. The interest rate swap agreements have an aggregate notional amount of $200 million maturing April 15, 2008 and $300 million maturing April 15, 2028. The floating rates are based on three-month London interbank offered rates ("LIBOR") plus .40% and .79% for the Senior Notes and Senior Debentures, respectively. As a result of the interest rate swap agreements, the Company's effective interest rates for the Senior Notes and Senior Debentures were 6.08% and 6.44%, respectively, for fiscal year 1999.The Company has designated the issuance of the Senior Notes and Senior Debentures and the related interest rate swap agreements as an integrated transaction. Accordingly, the differential to be paid or received on the interest rate swap agreements is accrued and recognized as an adjustment to interest expense as interest rates change.
