Microsoft gives final results of Activision bonds exchange offer

By Marisa Wong

Los Angeles, Nov. 15 – Microsoft Corp. announced the final results of its Oct. 16 exchange offer for 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, according to a press release late Tuesday evening.

Holders had tendered the following amounts after the early deadline at 5 p.m. ET on Oct. 27 and before the expiration of the offer at 5 p.m. ET on Nov. 14:

• $214,000, or 0.24%, of the $87,544,000 of 3.4% senior notes due Sept. 15, 2026 (Cusip: 00507VAK5) outstanding immediately following early settlement, leaving $87.33 million outstanding following final settlement;

• $1,663,000, or 3.55%, of the $46,817,000 of 3.4% senior notes due June 15, 2027 (Cusip: 00507VAM1) outstanding immediately following early settlement, leaving $45,154,000 outstanding following final settlement;

• $5,924,000, or 10.36%, of the $57,158,000 of 1.35% senior notes due Sept. 15, 2030 (Cusip: 00507VAP4) outstanding immediately following early settlement, leaving $51,234,000 outstanding following final settlement;

• $3,064,000, or 35.18%, of the $8.71 million of 4.5% senior notes due June 15, 2047 (Cusip: 00507VAN9) outstanding immediately following early settlement, leaving $5,646,000 outstanding following final settlement; and

• $1,114,000, or 1.84%, of the $60,688,000 of 2.5% senior notes due Sept. 15, 2050 (Cusip: 00507VAQ2) outstanding immediately following early settlement, leaving $59,574,000 outstanding following final settlement.

As previously reported, holders had tendered the following amounts as of the early deadline:

• $762,456,000, or 89.7%, of the $850 million outstanding 3.4% notes due 2026;

• $353,183,000, or 88.3%, of the $400 million outstanding 3.4% notes due 2027;

• $442,842,000, or 88.57%, of the $500 million outstanding 1.35% notes due 2030;

• $391.29 million, or 97.82%, of the $400 million outstanding 4.5% notes due 2047; and

• $1,439,312,000, or 95.95%, of the $1.5 billion outstanding 2.5% notes due 2050.

For each series, Microsoft offered 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 tendered by the early deadline.

Holders who tendered after the early deadline but before the final deadline will receive $970 principal amount of new notes and no cash per $1,000 of existing notes.

In connection with the final settlement, the company expects to issue the following additional amounts of new notes: $205,000 principal amount of 3.4% notes due 2026, $1.61 million principal amount of 3.4% notes due 2027, $5,743,000 principal amount of 1.35% notes due 2030, $2,972,000 principal amount of 4.5% notes due 2047 and $1.07 million principal amount of 2.5% notes due 2050.

Final settlement is expected to take place on Nov. 16.

As previously announced, Microsoft conducted a concurrent consent solicitation from holders of Activision Blizzard’s notes to some amendments to the note indentures.

The company was seeking to eliminate some of the covenants, restrictive provisions and events of default from the note indentures. Holders could not deliver consents without tendering their notes for exchange, and holders who tendered their notes for exchange were deemed to deliver their consents.

Microsoft had received the required number of consents to adopt the proposed amendments, as previously reported. The supplemental indentures became operational on the early settlement date, Nov. 6.

The offers and solicitations were 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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