Qualcomm announces pricing of tender offers for four series of notes

By Sarah Lizee

Olympia, Wash., Aug. 11 – Qualcomm Inc. announced it has priced the cash tender offers to repurchase four series of its outstanding notes totaling $7 billion.

The cash tender offers were launched alongside offers to exchange the four series of notes for two new series of notes, as previously reported.

The cash offers are open to retail investors only, while the exchange offers are open only to qualified institutional buyers, according to two press releases.

The Rule 144A and Regulation S cash offers and the exchange offers will expire at 5 p.m. ET on Aug. 11.

Tenders under guaranteed delivery procedures must be submitted by 5 p.m. ET on Aug. 13.

Settlement is expected to be on Aug. 14.

Cash offers

Qualcomm is offering to repurchase through four separate offers any and all of the following notes from retail investors:

• $2 billion outstanding 3% notes due 2022 (Csuip: 747525AE3), with pricing based on the 1.75% U.S. Treasury due May 15, 2022 and fixed spread of 15 basis points for a total consideration of $1,047.06 per $1,000 of notes;

• $1.5 billion outstanding 2.6% notes due 2023 (Cusip: 747525AR4), with pricing based on the 2.125% U.S. Treasury due Dec. 31, 2022 and fixed spread of 15 bps for a total consideration of $1,053.82 per $1,000 of notes;

• $1.5 billion outstanding 2.9% notes due 2024 (Cusip: 747525AT0), with pricing based on the 2.125% U.S. Treasury due March 31, 2024 and fixed spread of 15 bps for a total consideration of $1,090.54 per $1,000 of notes; and

• $2 billion outstanding 3.45% notes due 2025 (Cusip: 747525AF0), with pricing based on the 2% U.S. Treasury due Feb. 15, 2025 and fixed spread 20 bps for a total consideration of $1,133.31 per $1,000 of notes.

The company said it also intends to pay accrued interest on notes accepted for purchase.

The aggregate principal amount of cash payable to holders participating in the cash offers is capped at $300 million, not including coupon payments.

Exchange offers

Qualcomm is giving some holders the opportunity to exchange each of the four series of old notes for two new series of senior notes.

The old 2022 notes and old 2023 notes may be exchanged for new notes due May 20, 2028, and the old 2024 notes and old 2025 notes may be exchange for new notes due May 20, 2032.

The exchange consideration for each series will be calculated using the same reference security and fixed spread used for determining the consideration under the corresponding tender offer.

Holders will also receive accrued interest in cash.

The new 2028 notes will be priced based on the 0.375% U.S. Treasury due July 31, 2027 and a fixed spread of 85 bps, and the new 2032 notes will be priced based on the 0.625% U.S. Treasury due May 15, 2030 and a fixed spread of 100 bps.

No consents are being solicited as part of the exchange offers, the company noted.

Conditions

Each cash offer is conditioned on completion of the corresponding exchange offer for that series and subject to the maximum cash offer condition.

The exchange offers are conditioned on at least $500 million aggregate principal amount of new 2028 notes and at least $500 million aggregate principal amount of new 2032 notes being issued under the exchange offers.

Qualcomm said it will terminate a cash offer for a given series of old notes if it terminates the exchange offer for that same series, and vice versa.

The exchange offer completion condition to the cash offers may not be waived. However, Qualcomm has the option to waive the other conditions, including the aggregate maximum cash offer condition and either minimum condition requirement under the exchange offers.

If the new 2028 notes minimum condition is not satisfied, Qualcomm will not accept any old 2022 notes or old 2023 notes in the exchange offers and will terminate the corresponding cash offers for those notes; and similarly, if the new 2032 notes minimum condition is not satisfied, the company will not accept any old 2024 notes or old 2025 notes in the exchange offers and will terminate the corresponding cash offers for those notes.

If the aggregate maximum cash offer condition is not satisfied or waived, Qualcomm will terminate the cash offers and the exchange offers.

Goldman Sachs & Co. LLC (800 828-3182, 212 902-6941 or GS-LM- NYC@gs.com) and Barclays (800 438-3242, 212 528-7581 or us.lm@barclays.com) are joint lead dealer managers for the cash offers. Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Blaylock Van, LLC and Loop Capital Markets LLC are co-dealer managers.

Global Bondholder Services Corp. (866 470-3900, 212 430-3774, http://www.gbsc-usa.com/Qualcomm/) is the tender agent and information agent.

The San Diego-based company designs, develops, manufactures and markets wireless telecommunications products and services.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.