What is the main purpose of this $11.0 billion debt issuance?

The primary purpose of this debt issuance is to refinance existing debt. Broadcom Inc. intends to use the net proceeds from the sale of these notes to repay outstanding indebtedness under its existing credit agreement with Bank of America, N.A.

How are the new notes secured or guaranteed?

The notes are senior unsecured obligations of Broadcom Inc. They are initially fully and unconditionally guaranteed, jointly and severally, on an unsecured, unsubordinated basis by three specific subsidiaries: Broadcom Technologies Inc., Broadcom Corporation, and Broadcom Cayman Finance Limited. They are not secured by any specific assets.

What are the implications of the 'Change of Control' provision for investors?

If a 'Change of Control Triggering Event' (as defined in the Indenture) occurs, holders of the notes have the right to require Broadcom to purchase their notes at an offer price of 101% of the aggregate principal amount, plus accrued and unpaid interest. This provision offers a degree of protection to noteholders in the event of a significant corporate change.

What happens if Broadcom fails to register the notes as required?

Broadcom and the Guarantors have entered into a Registration Rights Agreement requiring them to use commercially reasonable efforts to register the notes for exchange or resale. If they fail to meet these obligations (a 'registration default'), additional interest will accrue on the principal amount of the affected notes. This additional interest starts at 0.250% annually and can increase by another 0.250% every 90 days, up to a maximum of 1.000% per annum, until the registration default is cured.

AVGO 8-K: Material Agreements & Financial Events

Summary

Broadcom Inc. (AVGO) announced on April 5, 2019, the completion of a significant debt financing round, issuing $11.0 billion in aggregate principal amount of senior unsecured notes. These notes are structured across various maturities, ranging from 2021 to 2029, with coupon rates varying from 3.125% to 4.750%. The primary use of the net proceeds from this issuance is to repay outstanding indebtedness under the Company's existing credit agreement. This debt issuance is a material event for investors as it directly impacts the company's capital structure and financial leverage. The specific terms of the notes, including optional redemption provisions, change of control purchase rights, and ranking relative to other debt, are important considerations for assessing the company's risk profile and financial flexibility. The Indenture also outlines restrictive covenants and events of default, which provide a framework for understanding potential limitations on the company's future actions and the rights of noteholders.

Key Highlights

1Broadcom Inc. completed the issuance of $11.0 billion in senior unsecured notes across multiple tranches (2021-2029).
2Proceeds from the note issuance will be used to repay existing indebtedness under Broadcom's credit agreement.
3The notes are guaranteed by certain Broadcom subsidiaries (Broadcom Technologies Inc., Broadcom Corporation, Broadcom Cayman Finance Limited).
4The Indenture allows for optional redemption by Broadcom under specific conditions and at certain premium prices, including 'make-whole' provisions.
5Noteholders have a right to require Broadcom to purchase notes upon a 'Change of Control Triggering Event' at 101% of principal plus accrued interest.
6The notes rank as senior unsecured obligations, equal to existing senior unsecured debt, but subordinate to secured obligations and effectively to indebtedness of non-guarantor subsidiaries.
7A Registration Rights Agreement mandates Broadcom to use commercially reasonable efforts to register the notes for exchange or resale, with potential for additional interest payments (up to 1.000%) if registration defaults occur.

Broadcom Inc. 8-K Report, Material Agreement (Apr 5, 2019)

Summary

Key Highlights

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