Boston Scientific discloses the following as part of its long-term debt footnote in its December 31, 2018 10-K. Borrowings and Credit Agreements Semi- annual In millions, except As of December 31, Coupon interest rates Issuance Date Maturity Date 2018 2017 Rate January 2020 Notes December 2009 January 2020 $850 $850 6.00% May 2020 Notes May 2015 May 2020 600 600 2.85% May 2022 Notes May 2015 May 2022 500 500 3.38% October 2023 Notes August 2013 October 2023 450 450 4.13% May 2025 Notes May 2015 May 2025 750 750 3.85% March 2028 Notes February 2018 March 2028 1,000 4.00% November 2035 Notes November 2005 November 2035 350 350 7.00% January 2040 Notes December 2009 January 2040 300 300 7.38% Unamortized debt insurance discount and deferred financing cost 2020-2040 (29) (24) Unamortized gain on fair value hedge 2020-2025 26 38 Capital lease obligation Various 6 1 Long-term debt $4,803 $3,815 (1) Corporate credit rating improvements may result in a decrease in the adjusted interest rate on our November 2035 Notes to the extent that our lowest credit rating is above BBB- or Baa3. The interest rates on our November 2035 notes will be permanently reinstated to the issuance rate if the lowest credit ratings assigned to these senior notes is either A-or A3 or higher. Boston Scientific discloses its required principal debt repayments due during each of the next five years and thereafter. In millions 2019 $2,248 2020 1,540 2021 2022 500 2023 450 Thereafter 2,400 Boston Scientific also discloses the following information. Interest Expense The following table provides a summary of our Interest expense and average borrowing rate : Year Ended December 31 (in millions) 2018 2017 2016 Interest expense $(241) $(229) $(233) Weighted average borrowing rate 3.60% 3.80% 4.00% Cash paid for interest $(262) $(235) $(233) The price of the Boston Scientific's bonds in February 2019 follows. Moody's Rating Maturity date Coupon Current Price Current Yield (02/21/2019) 2028 4.00% 109.35 2.80% Baa2 2023 4.13% 101.57 2.41% Baa2 Required a. What amount of Boston Scientific's long-term debt is due in 2019? $ 0 million b. What is the total amount of Boston Scientific's long-term debt at December 31, 2018, including the current maturities? $ 0 million c. The company's balance sheet reports short-term debt including current maturities of $2,253 million and $1,801 million in 2018 and 2017, respectively. Compute the average effective interest rate on the company's total debt for fiscal 2018. Compare this to the average interest rate the company reports. Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%). Computed average effective interest rate Company's reported average interest rate 0% 0 % Boston Scientific discloses the following as part of its long-term debt footnote in its December 31, 2018 10-K. Borrowings and Credit Agreements Semi- annual In millions, except As of December 31, Coupon interest rates Issuance Date Maturity Date 2018 2017 Rate January 2020 Notes December 2009 January 2020 $850 $850 6.00% May 2020 Notes May 2015 May 2020 600 600 2.85% May 2022 Notes May 2015 May 2022 500 500 3.38% October 2023 Notes August 2013 October 2023 450 450 4.13% May 2025 Notes May 2015 May 2025 750 750 3.85% March 2028 Notes February 2018 March 2028 1,000 4.00% November 2035 Notes November 2005 November 2035 350 350 7.00% January 2040 Notes December 2009 January 2040 300 300 7.38% Unamortized debt insurance discount and deferred financing cost 2020-2040 (29) (24) Unamortized gain on fair value hedge 2020-2025 26 38 Capital lease obligation Various 6 1 Long-term debt $4,803 $3,815 (1) Corporate credit rating improvements may result in a decrease in the adjusted interest rate on our November 2035 Notes to the extent that our lowest credit rating is above BBB- or Baa3. The interest rates on our November 2035 notes will be permanently reinstated to the issuance rate if the lowest credit ratings assigned to these senior notes is either A-or A3 or higher. Boston Scientific discloses its required principal debt repayments due during each of the next five years and thereafter. In millions 2019 $2,248 2020 1,540 2021 2022 500 2023 450 Thereafter 2,400 Boston Scientific also discloses the following information. Interest Expense The following table provides a summary of our Interest expense and average borrowing rate : Year Ended December 31 (in millions) 2018 2017 2016 Interest expense $(241) $(229) $(233) Weighted average borrowing rate 3.60% 3.80% 4.00% Cash paid for interest $(262) $(235) $(233) The price of the Boston Scientific's bonds in February 2019 follows. Moody's Rating Maturity date Coupon Current Price Current Yield (02/21/2019) 2028 4.00% 109.35 2.80% Baa2 2023 4.13% 101.57 2.41% Baa2 Required a. What amount of Boston Scientific's long-term debt is due in 2019? $ 0 million b. What is the total amount of Boston Scientific's long-term debt at December 31, 2018, including the current maturities? $ 0 million c. The company's balance sheet reports short-term debt including current maturities of $2,253 million and $1,801 million in 2018 and 2017, respectively. Compute the average effective interest rate on the company's total debt for fiscal 2018. Compare this to the average interest rate the company reports. Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%). Computed average effective interest rate Company's reported average interest rate 0% 0 %
