SAN JOSE, Calif., Sept. 13, 2021 /PRNewswire/ -- Broadcom Inc.
(Nasdaq: AVGO) ("Broadcom" or the "Company") announced today the
commencement of offers to all 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 a combination of up to
$2,750,000,000 aggregate principal
amount of the Company's new notes due 2035 (the "New 2035 Notes")
and a cash payment and to exchange Pool 2 Existing Notes for
consideration consisting of a combination of up to $2,250,000,000 aggregate principal amount of the
Company's new notes due 2036 (the "New 2036 Notes" and, together
with the New 2035 Notes, the "New Notes") and a cash payment, 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)
|
Sub-Cap(1)
|
Reference U.S. Treasury Security
|
Bloomberg
Reference
Page
|
Fixed
Spread
(bps)(2)
|
% of
Premium
in Cash(3)
|
11134L AP4
(Exch)
|
3.125% Senior
Notes
due 1/15/2025, issued
by Broadcom
Corporation
|
$585,069,000
|
1
|
N/A
|
0.750% due
August 31,
2026
|
FIT1
|
0
|
100%
|
11135F BC4
(Exch)
|
4.700% Senior
Notes
due 4/15/2025, issued
by the Company
|
$1,247,347,000
|
2
|
N/A
|
0.750% due
August 31,
2026
|
FIT1
|
25
|
100%
|
11135F AT8
(144A) U1109M AM8 (Reg
S) 11135F BB6 (Exch)
|
3.150% Senior
Notes
due 11/15/2025,
issued by the
Company
|
$1,417,586,000
|
3
|
N/A
|
0.750% due
August 31,
2026
|
FIT1
|
30
|
100%
|
11135F AE1
(144A) U1109M AE6 (Reg
S) 11135F AZ4 (Exch)
|
4.250% Senior
Notes
due 4/15/2026, issued
by the Company
|
$1,182,836,000
|
4
|
N/A
|
0.750% due
August 31,
2026
|
FIT1
|
45
|
100%
|
11135F AN1
(Exch)
|
3.459% Senior
Notes
due 9/15/2026, issued
by the Company
|
$1,695,320,000
|
5
|
$600,000,000
|
0.750% due
August 31,
2026
|
FIT1
|
60
|
100%
|
11134L AG4
(144A) U1108L AD1 (Reg
S) 11134L AH2 (Exch)
|
3.875% Senior
Notes
due 1/15/2027, issued
by Broadcom
Corporation
|
$3,812,954,000
|
6
|
$1,000,000,000
|
0.750% due
August 31,
2026
|
FIT1
|
70
|
100%
|
12673P AJ4
(144A)
|
4.700% Senior
Notes
due 3/15/2027, issued
by CA, Inc.
|
$350,000,000
|
7
|
N/A
|
0.750% due
August 31,
2026
|
FIT1
|
100
|
100%
|
11135F AK7
(144A) U1109M AH9 (Reg
S) 11135F AL5 (Exch)
|
4.110% Senior
Notes
due 9/15/2028, issued
by the Company
|
$2,222,349,000
|
8
|
N/A
|
1.250% due
August 15,
2031
|
FIT1
|
60
|
100%
|
|
|
(1)
The Pool 1 Existing Notes will be accepted in accordance with the
acceptance priority levels and the applicable sub-caps 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 at or
prior to the Early Participation Date will be eligible to receive
the Early Participant Payment of $50 (payable solely in New 2035
Notes) for each $1,000 principal amount of Pool 1 Existing Notes
validly tendered and not validly withdrawn.
|
(3) Represents the portion of the
Total Consideration in excess of $1,000 for each $1,000 principal
amount of Existing Notes that will be payable in cash (excluding
the Early Participant Payment, which, if applicable, will be paid
solely in the applicable series of New Notes).
|
Pool 2
Offers
|
|
CUSIP Numbers
|
Title
of Security (collectively, the
"Pool 2 Existing
Notes")
|
Principal Amount Outstanding
|
Acceptance Priority Level(1)
|
Sub-Cap(1)
|
Reference U.S. Treasury Security
|
Bloomberg
Reference
Page
|
Fixed
Spread
(bps)(2)
|
% of
Premium
in Cash(3)
|
11134L AQ2
(144A) U1108L AH2 (Reg
S) 11134L AR0 (Exch)
|
3.500% Senior
Notes due
1/15/2028, issued
by Broadcom
Corporation
|
$1,250,000,000
|
1
|
N/A
|
1.250%
due August
15, 2031
|
FIT1
|
35
|
100%
|
11135F AH4
(144A) U1109M AG1 (Reg
S) 11135F BD2 (Exch)
|
5.000% Senior
Notes due
4/15/2030, issued
by the Company
|
$2,250,000,000
|
2
|
N/A
|
1.250%
due August
15, 2031
|
FIT1
|
100
|
100%
|
11135F AB7
(144A) U1109M AB2 (Reg
S) 11135F BA8 (Exch)
|
4.750% Senior
Notes due
4/15/2029, issued
by the Company
|
$3,000,000,000
|
3
|
$600,000,000
|
1.250%
due August
15, 2031
|
FIT1
|
80
|
100%
|
11135F AP6
(144A) U1109M AK2 (Reg
S) 11135F AQ4 (Exch)
|
4.150% Senior
Notes due
11/15/2030,
issued by the
Company
|
$2,750,000,000
|
4
|
N/A
|
1.250%
due August
15, 2031
|
FIT1
|
105
|
100%
|
|
|
(1) The Pool 2 Existing Notes will be
accepted in accordance with the acceptance priority levels and the
applicable sub-caps 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 at or prior to the Early Participation
Date will be eligible to receive the Early Participant Payment of
$50 (payable solely in New 2036 Notes) for each $1,000 principal
amount of Pool 2 Existing Notes validly tendered and not validly
withdrawn.
|
(3) Represents the portion of the
Total Consideration in excess of $1,000 for each $1,000 principal
amount of Existing Notes that will be payable in cash (excluding
the Early Participant Payment, which, if applicable, will be paid
solely in the applicable series of New Notes).
|
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 2035
Notes
|
November
15, 2035
|
An amount of Pool 1
Existing Notes such that the aggregate principal
amount of New 2035 Notes issued does not exceed
$2,750,000,000
|
1.250% due
August 15, 2031
|
165
|
New 2036
Notes
|
November
15, 2036
|
An amount of Pool 2
Existing Notes such that the aggregate principal
amount of New 2036 Notes issued does not exceed
$2,250,000,000
|
1.250% due
August 15, 2031
|
170
|
The aggregate principal amount of New 2035 Notes to be issued
pursuant to the Exchange Offers will be subject to a maximum amount
of $2,750,000,000 aggregate principal
amount, and the aggregate principal amount of New 2036 Notes to be
issued pursuant to the Exchange Offers will be subject to a maximum
amount of $2,250,000,000 aggregate
principal amount.
The following is a summary of certain key terms of the Exchange
Offers:
- The Exchange Offers will expire at 12:00 midnight, New York City time, at the end of October 8, 2021, unless extended by the Company
(the "Expiration Date").
- Eligible Holders who validly tender and do not validly withdraw
their Existing Notes at or prior to the Early Participation Date
will receive: (a) New Notes of the applicable series in a principal
amount equal to (i) the Total Consideration (as defined below)
applicable to such Existing Notes minus (ii) the Cash Component (as
defined below), and (b) a cash payment equal to the Cash Component,
for each $1,000 principal amount of
such Existing Notes tendered and accepted for exchange by the
Company.
- Eligible Holders who validly tender and do not validly withdraw
their Existing Notes after the Early Participation Date will
receive: (a) New Notes of the applicable series in a principal
amount equal to (i) the Exchange Consideration (as defined below)
applicable to such Existing Notes minus (ii) the Cash Component,
and (b) a cash payment equal to the Cash Component, for each
$1,000 principal amount of such
Existing Notes tendered and accepted for exchange by the
Company.
- "Total Consideration" means, as calculated in accordance with
the formula set forth in Annex A to the Offering Memorandum, the
discounted value of the remaining payments of principal and
interest through the maturity date or 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 (a) 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
by the Dealer Managers (as defined below) in accordance with
standard market practice, as of 11:00
a.m. New York City time on
September 27, 2021 (such date and
time, the "Pricing Time"), as displayed on the Bloomberg Government
Pricing Monitor Pages listed in the tables set forth on the cover
page of the Offering Memorandum with respect to such series of
Existing Notes (or any recognized quotation source selected by the
Dealer Managers in their sole discretion if such page is not
available or is manifestly erroneous) and (b) the Fixed Spread as
set forth in the tables above with respect to such series of
Existing Notes. For the avoidance of doubt, the Total Consideration
includes the Early Participant Payment, as defined below.
- "Exchange Consideration" means the Total Consideration minus
the Early Participant Payment.
- "Cash Component" means the portion of the Total Consideration,
or the Exchange Consideration, as applicable, to be paid to holders
in cash and is equal to the applicable Total Consideration for the
relevant series of Existing Notes minus $1,000. For the avoidance of doubt, the Cash
Component payable with respect to each series of Existing Notes
validly tendered at or prior to the Early Participation Date, and
accepted by us for exchange, will be equivalent to the Cash
Component payable with respect to such series of Existing Notes
validly tendered after the Early Participation Date and at or prior
to the Expiration Date, and accepted by us for exchange.
- "Early Participant Payment" means $50 (payable in applicable New Notes) for each
$1,000 principal amount of each
series of Existing Notes tendered and not validly withdrawn at or
prior to the Early Participation Date.
- The Company will pay interest on the New 2035 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 1.250% United States Treasury due August
15, 2031 as of the Pricing Time as displayed on the
Bloomberg Government Pricing Monitor page FIT1 (or any recognized
quotation source selected by us in our sole discretion if such
quotation report is not available or is manifestly erroneous), plus
(b) a fixed spread of 165 basis points.
- The Company will pay interest on the New 2036 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 1.250% United States Treasury due August
15, 2031 as of the Pricing Time as displayed on the
Bloomberg Government Pricing Monitor page FIT1 (or any recognized
quotation source selected by us in our sole discretion if such
quotation report is not available or is manifestly erroneous), plus
(b) a fixed spread of 170 basis points.
- 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
September 30, 2021, 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 October 12,
2021, 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 September 24,
2021, 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.
- 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.
- 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 September 24, 2021, 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, if
any, issued on the Early Settlement Date 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, BNP Paribas Securities Corp.,
J.P. Morgan Securities LLC and TD Securities (USA) LLC are acting as dealer managers
(collectively, the "Dealer Managers").
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 United States
Securities Exchange Act of 1934, as amended, and Section 27A
of the United States Securities Act of 1933, as amended) 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: the ongoing COVID-19
pandemic, which has had, and will likely continue to have, a
negative impact on the global economy and disrupt normal business
activity, and which may have an adverse effect on our results of
operations; 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; global political and economic conditions;
government regulations and administrative proceedings, trade
restrictions and trade tensions; 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; 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; involvement in legal 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; 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; 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.
Ji Yoo
Investor Relations
408-433-8000
investor.relations@broadcom.com
(AVGO-Q)
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SOURCE Broadcom Inc.