Problem 1 Liability Disclosure

Loans Payable, Long-Term Debt and Other Commitments

Loans payable at December 31, 2013 included $2.1 billion of notes due in 2014, $1.6 billion of commercial paper, $402 million of short-term foreign borrowings and $370 million of long-dated notes that are subject to repayment at the option of the holder. Loans payable at December 31, 2012 included $1.8 billion of notes due in 2013, $1.7 billion of commercial paper, $454 million of short-term foreign borrowings and $328 million of long-dated notes that are subject to repayment at the option of the holders. The weighted-average interest rate of the commercial paper borrowings was 0.09% and 0.15% at December 31, 2013 and 2012, respectively.

Long-term debt at December 31 consisted of: (in $millions)	2013	2012
2.80% notes due 2023	$1,749	$
6.50% notes due 2033	1,306	1,310
5.00% notes due 2019	1,293	1,294
4.15% notes due 2043	1,246
3.875% notes due 2021	1,148	1,147
6.55% notes due 2037	1,143	1,146
6.00% notes due 2017	1,095	1,112
4.00% notes due 2015	1,029	1,049
4.75% notes due 2015	1,023	1,044
2.40% notes due 2022	1,000	1,000
Floating-rate borrowing due 2018	1,000
1.10% notes due 2018	998	998
0.70% notes due 2016	997
1.30% notes due 2018	975
2.25% notes due 2016	866	874
5.85% notes due 2039	749	749
Floating-rate borrowing due 2016	500
6.40% debentures due 2028	499	499
5.75% notes due 2036	498	498
5.95% debentures due 2028	498	498
3.60% notes due 2042	492	492
6.30% debentures due 2026	249	248
5.375% euro-denominated notes due 2014		2,058
Other	186	238
Totals	$ 20,539	$ 16,254

In May 2013, the Company completed an underwritten public offering of $6.5 billion senior unsecured notes consisting of $1.0 billion aggregate principal amount of 0.70% notes due in 2016,$500 million aggregate principal amount of floating rate notes due in 2016, $1.0 billion aggregate principal amount of 1.30% notes due in 2018, $1.0 billion aggregate principal amount of floating rate notes due in 2018, $1.75 billion aggregate principal amount of 2.80% notes due in 2023 and$1.25 billion aggregate principal amount of 4.15% notes due in 2043. Interest on the notes is payable semi-annually. A substantial portion of the net proceeds from the notes were used to repurchase the Companys common stock pursuant to an accelerated share repurchase agreement in May 2013.

Certain of the Companys borrowings require that Merck comply with financial covenants including a requirement that the Total Debt to Capitalization Ratio (as defined in the applicable agreements) not exceed 60%. At December 31, 2013, the Company was in compliance with these covenants.

The aggregate maturities of long-term debt for each of the next five years are as follows: 2014, $2.1 billion; 2015, $2.1 billion; 2016, $2.4 billion; 2017, $1.1 billion; 2018, $3.0 billion.

In May 2012, the Company entered into a $4.0 billion, five-year credit facility maturing in May 2017. The facility provides backup liquidity for the Companys commercial paper borrowing facility and is to be used for general corporate purposes. The Company has not drawn funding from this line of credit.

What characterizes Mercks most recent borrowings?

a. Higher rate fixed notes

b. Lower rate fixed notes

c. Variable rate notes

d. Mixture of low rate and variable rate notes

e. Mixture of high rate and variable rate notes