REDMOND, Wash., May 14, 2020 /PRNewswire/ -- Microsoft Corp.
(NASDAQ: MSFT) ("Microsoft") announced today the pricing terms with
respect to its offers to (i) exchange (the "Pool 1 Offer") the ten
series of notes described in the table below (collectively, the
"Pool 1 Notes") for a new series of Microsoft's 2.525% notes due
June 1, 2050 (the "New 2050 Notes")
and a cash payment, as applicable. For each $1,000 principal amount of Pool 1 Notes validly
tendered and not validly withdrawn prior to 11:59 p.m., New York
City time, on May 28, 2020
(the "Expiration Time") and accepted by Microsoft, the following
table sets forth the yield, the total exchange consideration, the
principal amount of the New 2050 Notes and the amount of the cash
payment, as applicable:
Pool 1
Table(1)
|
|
Title
of
Security
|
CUSIP
Number
|
Acceptance
Priority Level
|
Reference
UST Security(2)
|
Fixed
Spread
(basis
points)
|
Yield(3)
|
Early
Exchange
Premium(4)
|
Total
Exchange
Consideration
(4)(5)
|
Principal
Amount
of
New
Notes(6)
|
Cash
Payment(4)
|
|
|
|
|
|
|
|
|
|
|
4.875% Notes due
2043
|
594918AX2
|
1
|
30-year
|
+110
|
2.375%
|
$30
|
$1,441.62
|
$1,000.00
|
$441.62
|
5.300% Notes due
2041
|
594918AM6
|
2
|
30-year
|
+105
|
2.325%
|
$30
|
$1,486.31
|
$1,000.00
|
$486.31
|
4.450% Notes due
2045
|
594918BL7
|
3
|
30-year
|
+110
|
2.375%
|
$30
|
$1,388.59
|
$1,000.00
|
$388.59
|
4.250% Notes due
2047
|
594918CA0
|
4
|
30-year
|
+110
|
2.375%
|
$30
|
$1,363.95
|
$1,000.00
|
$363.95
|
5.200% Notes due
2039
|
594918AD6
|
5
|
30-year
|
+95
|
2.225%
|
$30
|
$1,458.92
|
$1,000.00
|
$458.92
|
4.500% Notes due
2040
|
594918AJ3
|
6
|
30-year
|
+100
|
2.275%
|
$30
|
$1,360.57
|
$1,000.00
|
$360.57
|
3.750% Notes due
2043
|
594918AU8
|
7
|
30-year
|
+110
|
2.375%
|
$30
|
$1,237.91
|
$1,000.00
|
$237.91
|
3.750% Notes due
2045
|
594918BD5
|
8
|
30-year
|
+110
|
2.375%
|
$30
|
$1,251.94
|
$1,000.00
|
$251.94
|
4.100% Notes due
2037
|
594918BZ6
|
9
|
30-year
|
+87
|
2.145%
|
$30
|
$1,266.05
|
$1,000.00
|
$266.05
|
4.200% Notes due
2035
|
594918BK9
|
10
|
30-year
|
+75
|
2.025%
|
$30
|
$1,278.89
|
$1,000.00
|
$278.89
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The figures in this
table assume a settlement date of June 1, 2020.
|
(2)
|
The "30-year
Reference UST Security" refers to the 2.375% U.S. Treasury Notes
due November 15, 2049.
|
(3)
|
Reflects the bid-side
yield of the 30-year Reference UST Security as of the pricing time
of 1.275% plus the applicable Fixed Spread, calculated in
accordance with the procedures set forth in the
Prospectus.
|
(4)
|
Per $1,000 principal
amount of Pool 1 Notes.
|
(5)
|
Holders who validly
tender Pool 1 Notes after 5:00 p.m., New York City time, on May 13,
2020 (the "Early Exchange Time") will not be eligible to receive
the Early Exchange Premium of $30 principal amount of the New 2050
Notes for each $1,000 principal amount of Pool 1 Notes validly
tendered and not withdrawn. For the avoidance of doubt, the $30 per
$1,000 Early Exchange Premium is included within the total exchange
consideration and is not in addition to the total exchange
consideration.
|
(6)
|
Does not reflect any
accrued and unpaid interest. The Company will pay accrued and
unpaid interest on the Existing Notes up to, but not including, the
settlement date.
|
and (ii) exchange (the "Pool 2 Offer" and, together with the
Pool 1 Offer, the "Exchange Offers") the four series of notes
described in the table below (collectively, the "Pool 2 Notes" and,
together with the Pool 1 Notes, the "Existing Notes") for a new
series of Microsoft 2.675% notes due June 1,
2060 (the "New 2060 Notes" and, together with the New 2050
Notes, the "New Notes") and a cash payment, as applicable. For each
$1,000 principal amount of Pool 2
Notes validly tendered and not validly withdrawn prior to the
Expiration Time and accepted by Microsoft, the following table sets
forth the yield, the total exchange consideration, the principal
amount of the New 2060 Notes and the amount of the cash payment, as
applicable:
Pool 2
Table(1)
|
|
Title
of
Security
|
CUSIP
Number
|
Acceptance
Priority Level
|
Reference
UST Security(2)
|
Fixed
Spread
(basis
points)
|
Yield(3)
|
Early
Exchange
Premium(4)
|
Total
Exchange
Consideration
(4)(5)
|
Principal
Amount
of
New
Notes(6)
|
Cash
Payment(4)
|
|
|
|
|
|
|
|
|
|
|
4.750% Notes due
2055
|
594918BM5
|
1
|
30-year
|
+125
|
2.525%
|
$30
|
$1,514.30
|
$1,138.86
|
$375.44
|
4.000% Notes due
2055
|
594918BE3
|
2
|
30-year
|
+125
|
2.525%
|
$30
|
$1,336.46
|
$1,000.00
|
$336.46
|
4.500% Notes due
2057
|
594918CB8
|
3
|
30-year
|
+125
|
2.525%
|
$30
|
$1,466.62
|
$1,107.32
|
$359.30
|
3.950% Notes due
2056
|
594918BU7
|
4
|
30-year
|
+125
|
2.525%
|
$30
|
$1,333.83
|
$1,000.00
|
$333.83
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The figures in this
table reflect any optional adjustments of the total exchange
consideration as permitted under the terms and conditions in the
Prospectus forming part of the Registration Statement and assume a
settlement date of June 1, 2020.
|
(2)
|
The "30-year
Reference UST Security" refers to the 2.375% U.S. Treasury Notes
due November 15, 2049.
|
(3)
|
Reflects the buy-side
yield of the 30-year Reference UST Security as of the pricing time
of 1.275% plus the applicable Fixed Spread, calculated in
accordance with the procedures set forth in the
Prospectus.
|
(4)
|
Per $1,000 principal
amount of Pool 2 Notes.
|
(5)
|
Holders who validly
tender Pool 2 Notes after the Early Exchange Time will not be
eligible to receive the Early Exchange Premium of $30 principal
amount of the New 2060 Notes for each $1,000 principal amount of
Pool 2 Notes validly tendered and not withdrawn. For the avoidance
of doubt, the $30 per $1,000 Early Exchange Premium is included
within the total exchange consideration and is not in addition to
the total exchange consideration.
|
(6)
|
Does not reflect any
accrued and unpaid interest. The Company will pay accrued and
unpaid interest on the Existing Notes up to, but not including, the
settlement date.
|
The aggregate principal amount of Pool 1 Notes and Pool 2 Notes
of each series that are accepted for exchange will be based on the
order of acceptance priority for such series, as applicable, as set
forth in the tables above, up to $6,250,000,000 aggregate principal amount (the
"New 2050 Notes Issue Cap") and up to $3,750,000,000 aggregate principal amount (the
"New 2060 Notes Issue Cap," increased from $3,000,000,000), respectively. Holders who
validly tender the Existing Notes after the Early Exchange Time but
on or before the Expiration Time will only be eligible to receive
the Exchange Consideration, which equals the Total Exchange
Consideration minus the Early Exchange Premium as detailed in the
tables above.
As permitted under the terms and conditions in the Registration
Statement (as defined below), the Company has elected to increase
the Cash Payment Percent of Premium on the 4.750% Notes due 2055
from 70% to 73%, the 4.500% Notes due 2057 from 70% to 77%, and the
3.950% Notes due 2056 from 90% to 100%. These changes are
reflected in the Cash Payment amounts shown in the tables
above.
In addition to the principal amount of New Notes and applicable
cash payment specified in the tables above, holders with Existing
Notes that are accepted for exchange will receive a cash payment
representing (i) all or a portion of the accrued and unpaid
interest to, but not including, the settlement date, and (ii)
amounts due in lieu of any fractional amounts of New Notes, in each
case, as described in the Prospectus.
A Registration Statement on Form S-4, including a prospectus
(the "Prospectus"), which is subject to change, relating to the New
Notes has been filed with the Securities and Exchange Commission
(the "SEC") on April 30, 2020 (the
"Registration Statement") but has not yet become effective. The New
Notes may not be sold nor may offers to buy be accepted prior to
the time the Registration Statement becomes effective. If and when
issued, the New Notes will be registered under the Securities Act
of 1933, as amended. This news release does not constitute an offer
or a solicitation by Microsoft of an offer to buy, nor shall there
be any sale of securities in any state in which such offer or
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
Consummation of the Exchange Offers is subject to a number of
conditions as set forth in the Prospectus included in the
Registration Statement, including, among other things, the
Registration Statement of which the Prospectus forms a part having
been declared effective by the SEC and remaining effective on the
settlement date.
The Exchange Offers are made only by and pursuant to the terms
and subject to the conditions set forth in the Prospectus, which
forms a part of the Registration Statement after it is declared
effective by the SEC, and the information in this news release is
qualified by reference to such Prospectus and the Registration
Statement. None of Microsoft, the dealer managers, or the
information agent and exchange agent makes any recommendations as
to whether holders should tender their Existing Notes pursuant to
the Exchange Offers. Holders must make their own decisions as to
whether to tender Existing Notes and, if so, the principal amount
of Existing Notes to tender.
Copies of the Prospectus pursuant to which the Exchange Offers
are being made, may be obtained from D.F. King & Co., Inc., the
information agent and exchange agent for the Exchange Offers, at
212-269-5552 (to exchange), at 800-431-9645 (for information U.S.
Toll-free), at 212-269-5550 (information for brokers), at
www.dfking.com/microsoft, or at microsoft@dfking.com.
Questions regarding the terms and conditions of the Exchange
Offers should be directed to the following joint lead dealer
managers:
BofA
Securities
620 South Tryon
Street, 20th Floor
Charlotte, NC
28255
Toll Free: (888)
292-0070
Collect: (980)
387-3907
Attn: Liability
Management Group
|
Deutsche Bank Securities Inc.
60 Wall
Street
New York, NY
10005
Toll Free: (866)
627-0391
Collect: (212)
250-2955
Attn: Liability
Management Group
|
In order to participate in any Exchange Offer, holders of the
Existing Notes located or resident in Canada are required to complete, sign and
submit to the exchange agent a Canadian Eligibility Form, which may
be obtained from D.F. King & Co., Inc. contacts above, to
confirm they satisfy applicable Canadian eligibility requirements
and to provide certain additional information.
Any holder of the Existing Notes located in any Member State of
the European Economic Area or in the United Kingdom that is a retain investor will
not be able to participate in the Exchange Offers. For these
purposes, a retain investor means a person who is one or more of
the following: (i) a retail client as defined in point (11) of
Article 4(1) of the EU Directive on Markets in Financial
Instruments (2014/65/EU) (as amended, "MiFID II"); or (ii) a
customer within the meaning of Directive (EU) 2016/97, where that
customer would not qualify as a professional client as defined in
point (10) of Article (4)(1) of MiFID II.
About Microsoft
Microsoft (Nasdaq "MSFT" @microsoft) enables digital
transformation for the era of an intelligent cloud and an
intelligent edge. Its mission is to empower every person and every
organization on the planet to achieve more.
Forward-Looking Statements
Statements in this news release are "forward-looking statements"
based on current expectations and assumptions that are subject to
risks and uncertainties. Actual results could differ materially
because of factors described above as well as:
- intense competition in all of our markets that may lead to
lower revenue or operating margins;
- increasing focus on cloud-based services presenting execution
and competitive risks;
- significant investments in products and services that may not
achieve expected returns;
- acquisitions, joint ventures, and strategic alliances that may
have an adverse effect on our business;
- impairment of goodwill or amortizable intangible assets causing
a significant charge to earnings;
- cyberattacks and security vulnerabilities that could lead to
reduced revenue, increased costs, liability claims, or harm to our
reputation or competitive position;
- disclosure and misuse of personal data that could cause
liability and harm to our reputation;
- the possibility that we may not be able to protect information
stored in our products and services from use by others;
- abuse of our advertising or social platforms that may harm our
reputation or user engagement;
- the development of the internet of things presenting security,
privacy, and execution risks;
- issues about the use of artificial intelligence in our
offerings that may result in competitive harm, legal liability, or
reputational harm;
- excessive outages, data losses, and disruptions of our online
services if we fail to maintain an adequate operations
infrastructure;
- quality or supply problems;
- the possibility that we may fail to protect our source
code;
- legal changes, our evolving business model, piracy, and other
factors may decrease the value of our intellectual property;
- claims that Microsoft has infringed the intellectual property
rights of others;
- claims against us that may result in adverse outcomes in legal
disputes;
- government litigation and regulatory activity relating to
competition rules that may limit how we design and market our
products;
- potential liability under trade protection, anti-corruption,
and other laws resulting from our global operations;
- laws and regulations relating to the handling of personal data
that may impede the adoption of our services or result in increased
costs, legal claims, fines, or reputational damage;
- additional tax liabilities;
- damage to our reputation or our brands that may harm our
business and operating results;
- exposure to increased economic and operational uncertainties
from operating a global business, including the effects of foreign
currency exchange;
- uncertainties relating to our business with government
customers;
- adverse economic or market conditions that may harm our
business;
- catastrophic events or geopolitical conditions, such
as the COVID-19 pandemic, that may disrupt our business; and
- the dependence of our business on our ability to attract and
retain talented employees.
For more information about risks and uncertainties associated
with Microsoft's business, please refer to the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and "Risk Factors" sections of Microsoft's SEC filings,
including, but not limited to, its annual report on Form 10-K and
quarterly reports on Form 10-Q that are incorporated by reference
in the Prospectus forming a part of the Registration Statement,
copies of which may be obtained by contacting Microsoft's Investor
Relations department at (800) 285-7772 or at Microsoft's Investor
Relations website
at http://www.microsoft.com/en-us/investor.
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SOURCE Microsoft Corporation