Microsoft offers to exchange 18 series of notes for new notes, cash

By Taylor Fox

New York, Feb. 16 – Microsoft Corp. launched an offer to exchange 14 series of existing notes for new notes due March 17, 2052 and cash and an offer to exchange four series of existing notes for a new series of notes due March 17, 2062 and cash, according to a news release.

The exchange offers will expire at 11:59 p.m. ET on March 15. The settlement date is expected to be March 17.

The early exchange date is 5 p.m. ET on March 1.

First pool

The principal amount of pool 1 notes of each series that are accepted for exchange will be based on the order of acceptance priority for such series, such that the total principal amount of pool 1 notes accepted in the offer results in the issuance of new 2052 notes in an amount not exceeding $6.25 billion.

The 14 series of existing notes in the first pool are the following, listed in order of acceptance priority level:

• $174,572,000 4.875% notes due 2043 (Cusip: 594918AX2) with pricing to be set using the 30-year Treasury plus 45 basis points;

• $1,288,337,000 4.45% notes due 2045 (Cusip: 594918BL7) with pricing to be set using the 30-year Treasury plus 50 bps;

• $1,584,630,000 4.25% notes due 2047 (Cusip: 594918CA0) with pricing to be set using the 30-year Treausry plus 55 bps;

• $770,339,000 5.3% notes due 2041 (Cusip: 594918AM6) with pricing to be set using the 30-year Treasury plus 30 bps;

• $558,545,000 5.2% notes due 2039 (Cusip: 594918AD6) with pricing to be set using the 30-year Treasury plus 20 bps;

• $571,171,000 4.5% notes due 2040 (Cusip: 594918AJ3) with pricing to be set using the 30-year Treasury plus 25 bps;

• $4.5 million 3.7% notes due 2046 (Cusip: 594918BT0) with pricing to be set using the 30-year Treasury plus 52 bps;

• $244,015,000 3.75% notes due 2043 (Cusip: 594918AU8) with pricing to be set using the 30-year Treasury plus 45 bps;

• $640,567,000 3.75% notes due 2045 (Cusip: 594918BD5) with pricing to be set using the 30-year Treasury plus 45 bps;

• $900 million 3.5% notes due 2042 (Cusip: 594918AR5) with pricing to be set using the 30-year Treasury plus 35 bps;

• $1,916,467,000 4.1% notes due 2037 (Cusip: 594918BZ6) with pricing to be set using the 30-year Treasury plus 5 bps;

• $1 billion 4.2% notes due 2035 (Cusip: 594918BK9) with pricing to be set using the 30-year Treasury minus 10 bps;

• $2.25 million 3.45% notes due 2036 (Cusip: 594918BS2) with pricing to be set using the 30-year Treasury minus 7 bps; and

• $1.5 million 3.5% notes due 2035 (Cusip: 594918BC7) with pricing to be set using the 30-year Treasury minus 15 bps.

The reference security for each series is the 1.625% Treasury due Nov. 15, 2050.

Holders who validly tender pool one notes before the early exchange time are eligible to receive a premium of $30 principal amount of new 2052 notes for each $1,000 principal amount of pool one notes validly tendered under the exchange.

Second pool

The aggregate principal amount of pool 2 notes of each series that are accepted for exchange will be based on the order of acceptance priority for such series, such that the principal amount of pool 2 notes accepted in the offer results in the issuance of new 2062 notes in an amount not exceeding $1.25 billion.

The four series of existing notes in the second pool are the following, listed in order of acceptance priority level:

• $1,954,510 3.95% notes due 2056 (Cusip: 594918BU7) with pricing to be set using the 30-year Treasury plus 67 bps and an 88% cash payment of the premium;

• $326,735,000 4.75% notes due 2055 (Cusip: 594918BM5) with pricing to be set using the 30-year Treasury plus 67 bps and a 72% cash payment of the premium;

• $883,777,000 billion 4.5% notes due 2057 (Cusip: 594918CB8) with pricing to be set using the 30-year Treasury plus 67 bps and a 72% cash payment of the premium; and

• $793,850,000 4% notes due 2055 (Cusip: 594918BE3) with pricing to be set using the 30-year Treasury plus 67 bps and a 94% cash payment of the premium.

The reference security for the pool two notes is also the 1.625% Treasury due Nov. 15, 2050.

Holders who validly tender pool two notes before the early exchange time are eligible to receive a premium of $30 principal amount of new 2062 notes for each $1,000 principal amount of pool two notes validly tendered under the exchange.

The cash payment percent of premium for each series is the percent of the amount by which the total exchange consideration exceeds $1,000 per $1,000 principal amount of pool one notes.

New notes

Pricing on the new notes due March 17, 2052 will be set using the 1.625% Treasury due Nov. 15, 2050 plus 70 bps.

Pricing on the new notes due March 17, 2062 will be set using the 1.625% Treasury due Nov. 15, 2050 plus 82 bps.

The pricing time will be 10 a.m. ET on March 2.

The exchange offers are subject to various conditions, including the requirement, with respect to the exchange offers of new notes for existing notes, that Microsoft issue at least $3 billion of new 2052 notes and $750 million of new 2062 notes.

The joint dealer managers are Morgan Stanley (800 624-1808 or 212 761-1057) and Wells Fargo Securities (866 309-6316 or 704 410-4756).

The exchange agent is D.F. King & Co., Inc. (212 269-5552, 800 431-9645, 212-269-5550 or microsoft@dfking.com).

The computer software company is based in Redmond, Wash.

© 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.