SAN JOSE, Calif., May 5, 2020 /PRNewswire/ -- Broadcom Inc.
(Nasdaq: AVGO) ("Broadcom" or the "Company") announced today the
commencement of offers to certain eligible holders (together, the
"Exchange Offers") of the Company's or its subsidiaries' Pool 1
Existing Notes and Pool 2 Existing Notes listed in the tables below
(collectively, the "Existing Notes") to exchange Pool 1 Existing
Notes for consideration consisting of up to $2,200,000,000 aggregate principal amount of the
Company's new notes due 2026 (the "New 2026 Notes") and to exchange
Pool 2 Existing Notes for consideration of up to $3,750,000,000 aggregate principal amount of the
Company's new notes due 2028 (the "New 2028 Notes" and, together
with the New 2026 Notes, the "New Notes"), the complete terms and
conditions of which are set forth in an offering memorandum, dated
today (the "Offering Memorandum"). Capitalized terms not defined
herein shall have the meanings ascribed to them in the Offering
Memorandum.
Pool 1
Offers
|
CUSIP Numbers
|
Title
of
Security
(collectively, the
"Pool
1 Existing Notes")
|
Principal
Amount
Outstanding
|
Acceptance Priority Level(1)
|
Reference U.S. Treasury Security
|
Bloomberg
Reference
Page
|
Fixed
Spread
(bps)(2)
|
11134LAJ8
(144A) U1108LAE9 (Reg
S) 11134LAK5
|
2.200% Senior
Notes,
due 1/15/2021, issued
by Broadcom
Corporation
|
$398,870,000
|
1
|
0.125% due
April 30,
2022
|
FIT1
|
60
|
11135FAA9 (144A)
U1109MAA4 (Reg S)
|
3.125% Senior
Notes,
due 4/15/2021, issued
by Broadcom Inc.
|
$725,841,000
|
2
|
0.125% due
April 30,
2022
|
FIT1
|
80
|
11134LAC3 (144A)
U1108LAB5 (Reg S)
11134LAD1
|
3.000% Senior
Notes,
due 1/15/2022, issued
by Broadcom
Corporation
|
$1,138,974,000
|
3
|
0.125% due
April 30,
2022
|
FIT1
|
85
|
12673PAH8
|
3.600% Senior
Notes,
due 8/15/2022, issued
by CA, Inc.
|
$500,000,000
|
4
|
0.125% due
April 30,
2022
|
FIT1
|
140
|
11135FAC5 (144A)
U1109MAC0 (Reg S)
|
3.125% Senior
Notes,
due 10/15/2022 issued
by Broadcom Inc.
|
$1,500,000,000
|
5
|
0.125% due
April 30,
2022
|
FIT1
|
115
|
|
(1)
The Pool 1 Existing Notes will be accepted in accordance with the
acceptance priority levels set forth in this table. All Pool 1
Existing Notes tendered for exchange in the Pool 1 Offers at or
prior to the Early Participation Date will have priority over any
Pool 1 Existing Notes that are tendered for exchange after the
Early Participation Date.
|
(2)
Eligible Holders who validly tender Pool 1 Existing Notes after the
Early Participation Date but at or prior to the Expiration Date
will be eligible to receive an amount of New 2026 Notes equal to
the Total Consideration (as defined below) less the "Early
Participant Payment" of $50 (payable in New 2026 Notes) for each
$1,000 principal amount of Pool 1 Existing Notes validly tendered
and not validly withdrawn.
|
|
Pool 2
Offers
|
CUSIP Numbers
|
Title
of
Security
(collectively, the
"Pool 2
Existing Notes")
|
Principal
Amount
Outstanding
|
Acceptance Priority Level(1)
|
Reference U.S. Treasury Security
|
Bloomberg
Reference
Page
|
Fixed
Spread
(bps)(2)
|
11134LAE9
(144A) U1108LAC3 (Reg
S) 11134LAF6
|
3.625% Senior
Notes,
due 1/15/2024, issued by
Broadcom Corporation
|
$2,500,000,000
|
1
|
0.375% due
April 30,
2025
|
FIT1
|
170
|
11135FAD3 (144A)
U1109MAD8 (Reg S)
|
3.625% Senior
Notes,
due 10/15/2024, issued
by Broadcom Inc.
|
$2,000,000,000
|
2
|
0.375% due
April 30,
2025
|
FIT1
|
175
|
|
(1) The Pool 2 Existing Notes will be
accepted in accordance with the acceptance priority levels set
forth in this table. All Pool 2 Existing Notes tendered for
exchange in the Pool 2 Offers at or prior to the Early
Participation Date will have priority over any Pool 2 Existing
Notes that are tendered for exchange after the Early Participation
Date.
|
(2) Eligible Holders who validly
tender Pool 2 Existing Notes after the Early Participation Date but
at or prior to the Expiration Date will be eligible to receive an
amount of New 2028 Notes equal to the Total Consideration less the
"Early Participant Payment" of $50 (payable in New 2028 Notes) for
each $1,000 principal amount of Pool 2 Existing Notes validly
tendered and not validly withdrawn.
|
Set forth below is a table summarizing certain material terms of
the New Notes to be issued in the Exchange Offers:
Title of
Series
|
Maturity
Date
|
Aggregate
Principal Amount of Existing Notes To Be Accepted for
Exchange
|
Reference
Security
|
Spread to Reference
Security (bps)
|
New 2026
Notes
|
September 15,
2026
|
An amount of Pool 1
Existing Notes such that the aggregate principal amount of New 2026
Notes issued does not exceed $2,200,000,000
|
0.375% due
April 30, 2025
|
310
|
New 2028
Notes
|
September 15,
2028
|
An amount of Pool 2
Existing Notes such that the aggregate principal amount of New 2028
Notes issued does not exceed $3,750,000,000
|
1.500% due
February 15,
2030
|
340
|
The aggregate principal amount of New 2026 Notes to be issued
pursuant to the Exchange Offers will be subject to a maximum amount
of $2,200,000,000 aggregate principal
amount, and the aggregate principal amount of New 2028 Notes to be
issued pursuant to the Exchange Offers will be subject to a maximum
amount of $3,750,000,000 aggregate
principal amount.
The following is a summary of certain key elements of the
planned Exchange Offers:
- The Exchange Offers will expire at 12:00 midnight, New York City time, at the end of June 2, 2020, unless extended by the Company (the
"Expiration Date").
- The applicable "Total Consideration," as calculated in
accordance with the formula set forth in Annex A to the Offering
Memorandum, for each $1,000 principal
amount of Existing Notes tendered and accepted for exchange by the
Company will equal the discounted value of the remaining payments
of principal and interest through the maturity on par call date, as
applicable, of the applicable series of Existing Notes (excluding
accrued and unpaid interest to, but not including, the applicable
Settlement Date, using a yield equal to the sum of (i) the bid-side
yield on the applicable Reference UST Security (as set forth in the
tables above with respect to such series of Existing Notes) as
calculated in accordance with standard market practice, as of
11:00 a.m. New York City time on May 19, 2020 (such date and time, the "Pricing
Time"), as displayed on the Bloomberg Government Pricing Monitor
pages listed in the tables set forth above with respect to such
series of Existing Notes and (ii) the Fixed Spread as set forth in
the tables above with respect to such series of Existing Notes.
-
- The Company will pay interest on the New 2026 Notes at a rate
per annum equal to (a) the yield, calculated in accordance with
standard market practice, that corresponds to the bid-side price of
the 0.375% United States Treasury due April
30, 2025 as of the Pricing Time as displayed on the
Bloomberg Government Pricing Monitor page FIT1 (or any recognized
quotation source selected by the Company in its sole discretion if
such quotation report is not available or is manifestly erroneous),
plus (b) a fixed spread of 310 basis points.
- The Company will pay interest on the New 2028 Notes at a rate
per annum equal to (a) the yield, calculated in accordance with
standard market practice, that corresponds to the bid-side price of
the 1.500% United States Treasury due February 15, 2030 as of the Pricing Time as
displayed on the Bloomberg Government Pricing Monitor page FIT1 (or
any recognized quotation source selected by the Company in its sole
discretion if such quotation report is not available or is
manifestly erroneous), plus (b) a fixed spread of 340 basis
points.
- The Total Consideration will include an "Early Participant
Payment" in an amount of $50 (payable
in applicable New Notes) for each $1,000 principal amount of each series of
Existing Notes tendered and accepted.
- The Total Consideration or the Exchange Consideration, as
applicable, for each $1,000 principal
amount of the Existing Notes, will be payable in New Notes as
further described in the Offering Documents.
- Assuming the Company elects to have an early settlement,
settlement for Existing Notes tendered at or prior to the Early
Participation Date and accepted by the Company is expected to be
May 21, 2020, unless extended by the
Company (the "Early Settlement Date"). Settlement for Existing
Notes tendered and accepted after the Early Participation Date is
expected to be June 4, 2020, unless
extended by the Company (the "Final Settlement Date").
- Eligible holders who validly tender and who do not validly
withdraw their Existing Notes at or prior to 5:00 p.m., New York
City time, on May 18, 2020,
unless extended by the Company (the "Early Participation Date"),
and whose tenders are accepted for exchange by the Company, will
receive the Total Consideration for each $1,000 principal amount of Existing Notes.
- Eligible holders who validly tender Existing Notes after the
Early Participation Date but prior to the Expiration Date, and
whose Existing Notes are accepted for exchange by the Company, will
receive the "Exchange Consideration," which is the Total
Consideration minus the Early Participant Payment.
- All Eligible Holders whose Existing Notes are accepted in an
Exchange Offer will receive a cash payment equal to accrued and
unpaid interest on such Existing Notes to, but not including, the
applicable Settlement Date in addition to their Total Consideration
or Exchange Consideration, as applicable.
- Tenders of Existing Notes in the Exchange Offers may be validly
withdrawn at any time at or prior to 5:00
p.m., New York City time,
on May 18, 2020, unless extended by
the Company (the "Withdrawal Deadline"), but will thereafter be
irrevocable, except in certain limited circumstances where
additional withdrawal rights are required by law.
- Consummation of the Exchange Offers is subject to a number of
conditions, including, among other things, the issuance of at least
$500,000,000 aggregate principal
amount of each series of New Notes and, the Company's determination
that New Notes issued on the Final Settlement Date, if any, will be
treated as part of the same issue as the relevant New Notes for
U.S. federal income tax purposes.
- The Company will not receive any cash proceeds from the
Exchange Offers.
If and when issued, the New Notes will not have been registered
under the Securities Act of 1933, as amended (the "Securities
Act"), or any state securities laws. The New Notes may not be
offered or sold in the United
States or to any U.S. persons except pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable
state securities laws. The Company will enter into a registration
rights agreement with respect to the New Notes. The New Notes will
be unsecured obligations of the Company and will rank pari passu
with all other unsecured and unsubordinated indebtedness of the
Company.
The Exchange Offers are only made, and copies of the documents
relating to the Exchange Offers will only be made available, to a
holder of Existing Notes who has certified in an eligibility
certification certain matters to the Company, including its status
as a "qualified institutional buyer" as defined in Rule 144A under
the Securities Act or who is a person other than a "U.S. person" as
defined in Rule 902 under the Securities Act. Holders of Existing
Notes who desire access to the electronic eligibility form should
contact D.F. King & Co., Inc., the information agent (the
"Information Agent") for the Exchange Offers, at (866) 416-0577
(U.S. Toll-free) or (212) 269-5550 (Collect). Holders that wish to
receive the Offering Documents can certify eligibility on the
eligibility website at: http://www.dfking.com/broadcom. In
connection with the Exchange Offers, Barclays Capital Inc. and
Credit Suisse Securities (USA)
Inc. are acting as dealer managers (collectively, the "Dealer
Managers"). Questions or requests for assistance in relation to the
Exchange Offers may be directed to the Dealer Managers at the
addresses and telephone numbers set forth below.
The Dealer Managers
Barclays
745 Seventh Avenue, 5th Floor
New York, New York 10019
Attention: Liability Management Group
U.S. Toll Free: (800) 438-3242
Collect: (212) 528-7581
Credit Suisse
11 Madison Avenue
New York, New York 10010
Attention: Liability Management Group
U.S. Toll Free: (800) 820-1653
Collect: (212) 325-2476
The Information and Tender Agent
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, New York 10005
Attention: Andrew Beck
Banks and Brokers call: (212) 269-5550
Toll-free: (866) 416-0577
This news release does not constitute an offer or an invitation
by the Company to participate in the Exchange Offers in any
jurisdiction in which it is unlawful to make such an offer or
solicitation in such jurisdiction. None of Broadcom, the
Information Agent or the Dealer Managers makes any recommendation
as to whether any eligible holders should participate in the
applicable Exchange Offer, and no one has been authorized by any of
them to make such a recommendation. Eligible holders must make
their own decisions as to whether to exchange their Existing Notes,
and if so, the principal amount of such Existing Notes to be
exchanged.
About Broadcom Inc.
Broadcom Inc., a Delaware
corporation headquartered in San Jose,
CA, is a global technology leader that designs, develops and
supplies a broad range of semiconductor and infrastructure software
solutions. Broadcom's category-leading product portfolio serves
critical markets including data center, networking, enterprise
software, broadband, wireless, storage and industrial. Our
solutions include data center networking and storage, enterprise,
mainframe and cyber security software focused on automation,
monitoring and security, smartphone components, telecoms and
factory automation.
Cautionary Note Regarding Forward-Looking
Statements
This announcement contains forward-looking statements (including
within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, and Section 27A of the Securities Act concerning
Broadcom. These statements include, but are not limited to,
statements that address our expected future business and financial
performance and other statements identified by words such as
"will", "expect", "believe", "anticipate", "estimate", "should",
"intend", "plan", "potential", "predict", "project", "aim", and
similar words, phrases or expressions. These forward-looking
statements are based on current expectations and beliefs of the
management of Broadcom, as well as assumptions made by, and
information currently available to, such management, current market
trends and market conditions and involve risks and uncertainties,
many of which are outside the Company's and management's control,
and which may cause actual results to differ materially from those
contained in forward-looking statements. Accordingly, you should
not place undue reliance on such statements.
Particular uncertainties that could materially affect future
results include risks associated with: our acquisition of Symantec
Corporation's Enterprise Security business ("Symantec Business"),
including (1) potential difficulties in employee retention, (2)
unexpected costs, charges or expenses, and (3) our ability to
successfully integrate the Symantec Business and achieve the
anticipated benefits of the transaction; any loss of our
significant customers and fluctuations in the timing and volume of
significant customer demand; our dependence on contract
manufacturing and outsourced supply chain; our dependency on a
limited number of suppliers; global economic conditions and
concerns; international political and economic conditions; any
acquisitions we may make, such as delays, challenges and expenses
associated with receiving governmental and regulatory approvals and
satisfying other closing conditions, and with integrating acquired
businesses with our existing businesses and our ability to achieve
the benefits, growth prospects and synergies expected by such
acquisitions, including our recent acquisition of the Symantec
Business; government regulations and trade restrictions; our
significant indebtedness and the need to generate sufficient cash
flows to service and repay such debt; dependence on and risks
associated with distributors and resellers of our products;
dependence on senior management and our ability to attract and
retain qualified personnel; involvement in legal or administrative
proceedings; quarterly and annual fluctuations in operating
results; our ability to accurately estimate customers' demand and
adjust our manufacturing and supply chain accordingly; cyclicality
in the semiconductor industry or in our target markets; our
competitive performance and ability to continue achieving design
wins with our customers, as well as the timing of any design wins;
prolonged disruptions of our or our contract manufacturers'
manufacturing facilities, warehouses or other significant
operations; our ability to improve our manufacturing efficiency and
quality; our dependence on outsourced service providers for certain
key business services and their ability to execute to our
requirements; our ability to maintain or improve gross margin; our
ability to protect our intellectual property and the
unpredictability of any associated litigation expenses;
compatibility of our software products with operating environments,
platforms or third-party products; our ability to enter into
satisfactory software license agreements; sales to our government
clients; availability of third party software used in our products;
use of open source code sources in our products; any expenses or
reputational damage associated with resolving customer product
warranty and indemnification claims; market acceptance of the end
products into which our products are designed; our ability to sell
to new types of customers and to keep pace with technological
advances; our compliance with privacy and data security laws; our
ability to protect against a breach of security systems; changes in
accounting standards; fluctuations in foreign exchange rates; our
provision for income taxes and overall cash tax costs, legislation
that may impact our overall cash tax costs and our ability to
maintain tax concessions in certain jurisdictions; and other events
and trends on a national, regional and global scale, including
those of a political, economic, business, competitive and
regulatory nature. Many of the foregoing risks and uncertainties
are, and will be, exacerbated by the COVID-19 pandemic and any
worsening of the global business and economic environment as a
result.
Our filings with the Securities and Exchange Commission ("SEC"),
which you may obtain for free at the SEC's website at
http://www.sec.gov, discuss some of the important risk factors that
may affect our business, results of operations and financial
condition. Actual results may vary from the estimates provided. We
undertake no intent or obligation to publicly update or revise any
of the estimates and other forward-looking statements made in this
announcement, whether as a result of new information, future events
or otherwise, except as required by law.
Contact:
Broadcom Inc.
Beatrice F. Russotto
Investor Relations
408-433-8000
investor.relations@broadcom.com
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SOURCE Broadcom Inc.