Microsoft offers to swap Activision Blizzard notes for new notes, cash

By Wendy Van Sickle

Columbus, Ohio, Oct. 16 – Microsoft Corp. is offering to exchange any and all of the outstanding notes issued by Activision Blizzard, Inc. for up to $3.65 billion of new notes issued by Microsoft and cash and is concurrently soliciting consents from holders of Activision Blizzard’s notes to some amendments to the note indentures, according to an 8-K filing with the Securities and Exchange Commission and a company news release.

The offers are in connection with Microsoft’s acquisition of Activision Blizzard.

The following Activision Blizzard notes are covered by the offer:

• $850 million of 3.4% senior notes due Sept. 15, 2026 (Cusip: 00507VAK5);

• $400 million of 3.4% senior notes due June 15, 2027 (Cusip: 00507VAM1);

• $500 million of 1.35% senior notes due Sept. 15, 2030 (Cusip: 00507VAP4);

• $400 million of 4.5% senior notes due June 15, 2047 (Cusip: 00507VAN9); and

• $1.5 billion of 2.5% senior notes due Sept. 15, 2050 (Cusip: 00507VAQ2).

For each series, Microsoft is offering a total consideration per $1,000 of existing notes of $1,000 principal amount of new notes, with the same tenor and coupon as the notes exchanged, plus $1 in cash to holders who tender by the early deadline, 5 p.m. ET on Oct. 27.

Holders who tender after the early deadline but before the final deadline, 5 p.m. ET on Nov. 14, will receive $970 principal amount of new notes and no cash per $1,000 of existing notes.

Under the consent solicitation, Microsoft is seeking to eliminate some of the covenants, restrictive provisions and events of default from the note indentures. Holders may not deliver consents without tendering their notes for exchange, and holders who tender their notes for exchange will be deemed to deliver their consents.

Each exchange offer and consent solicitation is conditioned upon the completion of the other exchange offers and consent solicitations.

The offers and solicitations are being made only to eligible holders who are qualified institutional buyers under Rule 144A or non-U.S. persons under Rule 902.

D.F. King & Co., Inc. (MSFT-ATVI@dfking.com, 866 227-7300 or 212 269-5550) is the information agent and exchange agent.

The computer software company is based in Redmond, Wash.

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