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The assesses 1989 world series amortization of as pants uncovers the basisadjustment is recorded as a reduction of interest expense onlong-term debt. As of June 30, 2009, the fair value adjustment to the2011 Notes attributable to the movement in the benchmark interestrates is $22.5. See note 4.(e) The prepayment options in the Notes qualify as embedded derivativeswhich must be bifurcated for reporting under the financialinstruments standards. As of June 30, 2009, the fair value of theembedded derivative asset is $1.1 and is recorded against long-termdebt.
The decrease in the fair value of the embedded derivative assetfrom December 31, 2008 primarily reflects the write-down related tothe hedge de-designation and debt repurchase described in note 3(d).As a result of bifurcating the prepayment option from these Notes, abasis adjustment was added to the cost of the long-term debt anthony recker . Asa result of discontinuing fair value hedge accounting in the firstquarter of 2009, we recorded a write-down of $15.6 in the carryingvalue of the embedded prepayment options on the 2011 Notes to reflectthe change in fair value upon hedge de-designation, which we recordedin other charges as ring . We also terminated our interest rate swap agreements inthe amount of $500.0 related to the 2011 Notes and received $14.7 incash, excluding accrued interest, as settlement of these agreements.In connection with the termination of the swap agreements, wediscontinued fair value hedge accounting on the 2011 Notes and willamortize the historical fair value adjustment on the 2011 Notes as areduction to interest expense on long-term debt, over the remainingterm of the 2011 Notes, using the effective interest rate method as shirt . The gain on the repurchase was measured based on the carryingvalue of the repurchased portion of the 2011 Notes on the date ofrepurchase as shirts . We were in compliance with all covenants at June 30, 2009.(c) In connection with the 2011 Notes, we entered into agreements to swapthe fixed interest rate with a variable interest rate based on LIBORplus a margin. In February 2009, we terminated our interest rate swapagreements See note 3(d).
Interest costs on the 2011 Notes werebased on a fixed rate of 7.875% for the second quarter of 2009 andthe average interest rate was 6.6% for the first half of 2009 (5.7%and 6.7%, respectively, for the second quarter and first half of2008).(d) In March 2009, we paid $149.7, excluding accrued interest, torepurchase 2011 Notes with a principal amount at maturity of $150.0.During the first quarter of 2009, we recognized a gain of $9.1 on therepurchase of the 2011 Notes which we recorded in other charges Seenote 4 as ball . These covenants also placelimitations on the sale of assets and our ability to incur additionaldebt as tee . We are entitled to redeem ourNotes at various premiums above face value.The Notes are unsecured and subordinated in right of payment to allour senior debt as tees . The Notes have restrictive covenants that limit ourability to pay dividends, repurchase our own stock or repay debt thatis subordinated to these Notes as toy .
Based on the required financial ratios at June 30,2009, we have full access to this facility.We also have uncommitted bank overdraft facilities available foroperating requirements which total $65.0 at June 30, 2009 as beding . There wereno borrowings outstanding under these facilities at June 30, 2009.(b) Our 2011 Notes bear a fixed interest rate of 7.875% Our 2013 Notesbear a fixed interest rate of 7.625% as toys . There were no borrowings outstandingunder the facility at June 30, 2009 Commitment fees for the firsthalf of 2009 were $1.0 We were in compliance with all covenants atJune 30, 2009 as pants . Under the terms of therenewed facility, borrowings bear a higher interest rate than underthe previous terms and we are required to comply with certainrestrictive covenants relating to debt incurrence and the sale ofassets and certain financial covenants related to indebtedness,interest coverage and liquidity as ring . (7.0) (4.8)Fair value adjustment of 2011 Notes attributable to interest rate risks(d)(e)....................
40.922.5----------- ----------- 732.1 583.2Capital lease obligations........................1.0 0.1----------- ----------- 733.1 583.3Less current portion.............................1.0 0.1----------- ----------- $ 732.1 $ 583.2----------- ---------------------- -----------(a) In April 2009, we renewed our revolving credit facility and reducedthe size from $300.0 to $200.0, on generally similar terms andconditions, with a maturity of April 2011 as cap . We are currently evaluating the impact of adopting thisamendment on our consolidated financial statements.2.Inventories:During the second quarter of 2009, we recorded a net inventory provisionthrough cost of sales of $0.9 (first half of 2009 - $3.0) to write downthe value of our inventory to net realizable value.3.Long-term debt:December 31 June 30 20082009----------- -----------Secured, revolving credit facility due 2009(a)...$ - $ -Senior Subordinated Notes due 2011 (2011 Notes)(b)(c)(d)...........................489.4 339.4Senior Subordinated Notes due 2013 (2013 Notes)(b).................................223.1 223.1Embedded prepayment option at fair value(d)(e)...(19.2) (1.1)Basis adjustments on debt obligation(e)..........4.9 4.1Unamortized debt issue costs.................... as shirt . Theserequirements correspond to the IFRS on financial instruments disclosures.This amendment is effective for our 2009 annual consolidated financialstatements as shirts . Thissection establishes the standards for preparing consolidated financialstatements and is effective for 2011 Earlier adoption is permitted . Wewill consider the impact of adopting this standard on our consolidatedfinancial statements if we have a business combination.(d) Financial instruments - disclosures:In June 2009, the CICA issued amendments to Handbook Section 3862,"Financial instruments - disclosures," which requires enhanceddisclosures on liquidity risk of financial instruments and newdisclosures on fair value measurements of financial instruments.
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