8-KMaterial AgreementsFinancial EventsExhibits & Filings

Broadcom Inc. 8-K Report, Material Agreement (May 21, 2020)

Filed May 21, 2020For Securities:AVGO

Summary

Broadcom Inc. (AVGO) has completed the early settlement of its private offers to exchange certain outstanding notes for newly issued Senior Notes due 2026 and 2028. This transaction involved the cancellation of approximately $4.6 billion in aggregate principal amount of existing notes and the issuance of new notes totaling roughly $3.9 billion. This move represents a proactive step by Broadcom to manage its debt profile, potentially optimizing its capital structure and extending its debt maturities. The new notes, carrying interest rates of 3.459% and 4.110% respectively, were issued under a new indenture and offered to qualified institutional buyers and non-U.S. persons in private placements. Investors should note that the New Notes are senior unsecured obligations, ranking equally with other senior unsecured debt but subordinated to secured debt and effectively subordinated to subsidiary debt. The indenture includes standard restrictive covenants and events of default. Additionally, a registration rights agreement has been entered into, which, if not satisfied by Broadcom, could result in additional interest payments on the new notes. This exchange offer reflects Broadcom's ongoing efforts to manage its financial obligations and capital structure.

Key Highlights

  • 1Broadcom completed early settlement of private offers to exchange existing notes for new 3.459% Senior Notes due 2026 and 4.110% Senior Notes due 2028.
  • 2Approximately $4.6 billion aggregate principal amount of existing notes were tendered and cancelled.
  • 3Approximately $3.9 billion aggregate principal amount of new notes were issued.
  • 4The new notes are senior unsecured obligations, ranking equally with other senior unsecured debt.
  • 5New notes are subject to optional redemption provisions and a change of control purchase right for holders.
  • 6A registration rights agreement was executed, with potential for additional interest payments if registration obligations are not met.
  • 7The transaction aimed at managing Broadcom's debt maturity profile and capital structure.

Frequently Asked Questions

This filing reports the completion of Broadcom's private offers to exchange outstanding notes for new senior notes due in 2026 and 2028. This is a debt management transaction aimed at optimizing the company's capital structure and potentially extending its debt maturity profile.

Broadcom cancelled approximately $4.6 billion in aggregate principal amount of various existing notes. In exchange, the company issued approximately $1.69 billion in new 3.459% Senior Notes due 2026 and approximately $2.22 billion in new 4.110% Senior Notes due 2028.

The new notes are Broadcom's senior unsecured obligations. They rank equally in right of payment with existing and future senior unsecured indebtedness, senior to subordinated indebtedness, effectively subordinated to secured obligations to the extent of collateral, and structurally subordinated to indebtedness of non-guarantor subsidiaries.

Yes, a Registration Rights Agreement was entered into. If Broadcom fails to meet its obligations to register the new notes or comparable notes within specified timeframes, additional interest will accrue on the outstanding principal at increasing rates, up to a maximum of 1.000% annually, until the registration default is cured.