Item 1.01 Entry into Definitive Material Agreement.
On
Broadcom intends to use the net proceeds from the sale of the Notes to repay certain of its existing indebtedness, including funding the purchase of the Tender Offer Notes (defined below) and the payment of accrued and unpaid interest, premiums, if any, fees and expenses in connection therewith.
Indenture
The Notes were issued pursuant to an Indenture, dated as of
Optional Redemption Provisions and Change of Control Purchase Right
The Company may, at its option, redeem or purchase, in whole or in part, the
2028 Notes, the 2031 Notes, the 2033 Notes, the 2041 Notes and the 2051 Notes at
any time prior to
In the event that certain changes in the tax law of any relevant jurisdiction would impose withholding taxes on payments on the Notes, the Company may redeem a series of Notes in whole, but not in part, at any time, at a redemption price of 100% of the principal amount, plus accrued and unpaid interest thereon, if any, and Additional Amounts (as defined in the Indenture), if any, to the redemption date.
The holders of the Notes will also have the right to require the Company to purchase their Notes upon the occurrence of a Change of Control Triggering Event, as defined in the Indenture, at an offer price equal to 101% of the aggregate principal amount of the Notes purchased plus accrued and unpaid interest thereon to, but excluding, the date of purchase.
Ranking
Under the terms of the Indenture, the Notes and the guarantees are the Company's and the Guarantors' respective senior unsecured obligations and (i) rank equal in right of payment with all of the Company's and the Guarantors' respective existing and future senior unsecured indebtedness, (ii) rank senior in right of payment to the Company's and the Guarantors' respective existing and future subordinated indebtedness, (iii) are effectively subordinated in right of payment to the Company's and the Guarantors' respective existing and future secured obligations, to the extent of the assets securing such obligations and (iv) are structurally subordinated in right of payment to any existing and future indebtedness or other liabilities, including trade payables, of the Company's subsidiaries (excluding the Guarantors) and the Guarantors' respective subsidiaries.
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Restrictive Covenants
The Indenture contains covenants that, subject to certain qualifications and exceptions, limit the ability of the Company, the Guarantors and their subsidiaries to, among other things, (i) incur certain secured debt; (ii) enter into certain sale and lease-back transactions and (iii) consolidate, merge, sell or otherwise dispose of all or substantially all of their assets.
Events of Default
Upon the occurrence of an event of default under the Indenture with respect to the Notes, which includes payment defaults, defaults in the performance of certain covenants and bankruptcy and insolvency related defaults, the Company's obligations under the Notes may be accelerated, in which case the entire . . .
Item 1.02 Termination of a Definitive Material Agreement.
In connection with the consummation of the Offering and the Company's entry into
the Credit Agreement, on the Closing Date the Company terminated all outstanding
commitments and repaid all outstanding obligations, as applicable, under each of
(a) the Credit Agreement, dated as of
The
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Credit Agreement would have matured in 2022 and 2024, respectively. Borrowings under the Existing Credit Agreements bore interest at a fluctuating rate per annum equal to, at the Company's option, the alternate base rate or the reserve adjusted Eurocurrency rate, in each case, plus an applicable margin that varied by facility and that was calculated based on the Company's credit ratings from time to time.
Many of the lenders under the Existing Credit Agreements and/or their affiliates have in the past performed, and may in the future from time to time perform, investment banking, financial advisory, lending, hedging, cash management and/or commercial banking services, or other services in the ordinary course of business for the Company and its subsidiaries (including in connection with the transactions described in this Current Report on Form 8-K), for which they have received, and may in the future receive, customary compensation and expense reimbursement.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The description contained under Item 1.01 above is hereby incorporated by reference in its entirety into this Item 2.03.
Item 8.01 Other Events.
In a press release issued on
The foregoing description is qualified in its entirety by reference to the press
release dated
This Current Report on Form 8-K is not an offer to purchase or sell or a solicitation of an offer to purchase or sell, with respect to any securities.
Cautionary Note Regarding Forward-Looking Statements
This report contains forward-looking statements (including within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended) concerning Broadcom. These statements include, but are not limited to, statements that address our expected future business and financial performance and other statements identified by words such as "will", "expect", "believe", "anticipate", "estimate", "should", "intend", "plan", "potential", "predict" "project", "aim", and similar words, phrases or expressions. These forward-looking statements are based on current expectations and beliefs of the management of Broadcom, as well as assumptions made by, and information currently available to, such management, current market trends and market conditions and involve risks and uncertainties, many of which are outside the Company's and management's control, and which may cause actual results to differ materially from those contained in forward-looking statements. Accordingly, you should not place undue reliance on such statements.
Particular uncertainties that could materially affect future results include risks associated with: the COVID-19 pandemic, which has, and will likely continue to, negatively impact the global economy and disrupt normal business activity, and which may have an adverse effect on our results of operations; any loss of our significant customers and fluctuations in the timing and volume of significant customer demand; our dependence on contract manufacturing and outsourced supply chain; our dependency on a limited number of suppliers; global economic conditions and concerns; global political and economic conditions; government regulations, trade restrictions and trade tensions; our significant indebtedness and the need to generate sufficient cash flows to service and repay such debt; dependence on and risks associated with distributors and resellers of our products; dependence on senior management and our ability to attract and retain qualified personnel; any acquisitions we may make, such as delays, challenges and expenses associated with receiving governmental and regulatory approvals and satisfying other closing conditions, and with integrating acquired businesses with our existing businesses and our ability to
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achieve the benefits, growth prospects and synergies expected by such acquisitions; involvement in legal or administrative proceedings; quarterly and annual fluctuations in operating results; our ability to accurately estimate customers' demand and adjust our manufacturing and supply chain accordingly; cyclicality in the semiconductor industry or in our target markets; our competitive performance and ability to continue achieving design wins with our customers, as well as the timing of any design wins; prolonged disruptions of our or our contract manufacturers' manufacturing facilities, warehouses or other significant operations; our ability to improve our manufacturing efficiency and quality; our dependence on outsourced service providers for certain key business services and their ability to execute to our requirements; our ability to maintain or improve gross margin; our ability to protect our intellectual property and the unpredictability of any associated litigation expenses; compatibility of our software products with operating environments, platforms or third-party products; our ability to enter into satisfactory software license agreements; availability of third party software used in our products; use of open source code sources in our products; any expenses or reputational damage associated with resolving customer product warranty and indemnification claims; market acceptance of the end products into which our products are designed; our ability to sell to new types of customers and to keep pace with technological advances; our compliance with privacy and data security laws; our ability to protect against a breach of security systems; fluctuations in foreign exchange rates; our provision for income taxes and overall cash tax costs, legislation that may impact our overall cash tax costs and our ability to maintain tax concessions in certain jurisdictions; and other events and trends on a national, regional and global scale, including those of a political, economic, business, competitive and regulatory nature. Many of the foregoing risks and uncertainties are, and will be, exacerbated by the COVID-19 pandemic and any worsening of the global business and economic environment as a result.
Our filings with the
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 4.1 Indenture, dated as ofJanuary 19, 2021 , by and among the Company, theGuarantors andWilmington Trust, National Association , as trustee. 4.2 Form of 1.950% Senior Notes due 2028 (included in Exhibit 4.1). 4.3 Form of 2.450% Senior Notes due 2031 (included in Exhibit 4.1). 4.4 Form of 2.600% Senior Notes due 2033 (included in Exhibit 4.1). 4.5 Form of 3.500% Senior Notes due 2041 (included in Exhibit 4.1). 4.6 Form of 3.750% Senior Notes due 2051 (included in Exhibit 4.1). 4.7 Registration Rights Agreement, dated as ofJanuary 19, 2021 , by and among the Company, the Guarantors andMorgan Stanley & Co. LLC ,BNP Paribas Securities Corp. ,RBC Capital Markets, LLC ,SMBC Nikko Securities America, Inc. andTruist Securities, Inc. , as representatives of the several initial purchasers of the Notes. 10.1 Credit Agreement, dated as ofJanuary 19, 2021 , among the Company, the lenders and other parties party thereto, andBank of America, N.A ., as Administrative Agent. 99.1 Press release, datedJanuary 19, 2021 , entitled "Broadcom Inc. Announces Early Results of Previously Announced Debt Tender Offers." 104 Cover Page Interactive Data File (formatted as Inline XBRL).
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