Loblaw Companies Limited distribute food, general merchandise, and financial products and services across Canada, through Superstore, Extra Foods, Dominion, Fortinos, No Frills, Independent, Zehrs, Dominion and Provigo, as well as Loblaws stores. Their brands include President's Choice, no name, and Joe Fresh Style. Exhibit 10-16 contains excerpts from three notes related to long-term liabilities accompanying Loblaw Companies Limited's 2009 financial statements. All dollar amounts in the notes are in millions.
During 2008, the Company issued United States Dollar ("USD") $300 of fixed rate notes in a private placement debt financing which contains certain financial covenants (see note 21). The notes were issued in two equal tranches of USD $150 with 5 and 7 year maturities at interest rates of 6.48% and 6.86%, respectively.
LOBLAW COMPANIES LIMITED 2009 ANNUAL REPORT
Excerpts from Notes 18 and 21 to the Financial Statements

a. Looking at Loblaw's series of notes outstanding and the recent private placement, what do you think the relationship is between interest rates and the length of time to maturity of a loan? As an investor, explain why this relationship would be important to you.
b. Compare the rate of interest on the long-term debt secured by a mortgage that is due in 2018 to the note due in 2016. Why do you think the debt due in 2018 has a lower interest rate than the note due in 2016?
c. Explain why Loblaw would spread out the maturities of their debt over such a long period of time. When they issued the private placement notes, why did they not arrange to have both tranches mature at the same time?
d. What is meant by a private placement?
e. Are capital (finance) leases a major form of long-term financing for Loblaw? Support your answer.
f. Does Loblaw use many operating leases? Why might an analyst be concerned with Loblaw's operating leases?
g. What type of covenants are attached to Loblaw's long-term debt? Explain why these covenants would be useful to lenders or investors.

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Loblaw Companies Limited Notes 5.75%, due 2009 7.10%, due 2010 6.50%, due 2011 540%, due 2013 6.00%, due 2014 4.85%, due 2014 7.10%, due 2016 6.65%, due 2027 6.45%, due 2028 6.50%, due 2029 11.40%, due 2031 S 125 300 200 100 100 100 100 200 175 175 151 (67) 200 151 (55) 200 - principal effect of coupon repurchase 6.85%, due 2032 6.54%, due 2033 8.75%, due 2033 6.05%, due 2034 6.15%, due 2035 5.90%, due 2036 6.45%, due 2039 7.00%, due 2040 5.86%, due 2043 200 200 200 150 300 200 150 Private Placement Notes 6.48%, due 20131 US S150 million) 6.86%, due 2015 US S150 million) 158 158 180 181 Long Term Debt Secured by Mortgage 5.49%, due 20181 see note 111 96 163 64 VIE loans payablel (see note 27) Capital lease obligationsl (see note 18) Other Total long term debt Less amount dus within one year 152 62 4,505 343 S 4,162 ,235 165 S 4,070