8-KMaterial AgreementsFinancial EventsExhibits & Filings

Salesforce, Inc. 8-K Report, Material Agreement (Apr 11, 2018)

Filed April 11, 2018For Securities:CRM

Summary

Salesforce, Inc. (CRM) filed an 8-K on April 11, 2018, to report the issuance of $2.5 billion in aggregate principal amount of Senior Notes. This issuance includes $1 billion of Senior Notes due 2023 with a 3.250% interest rate and $1.5 billion of Senior Notes due 2028 with a 3.700% interest rate. The primary intended use of the net proceeds from this offering is to partially fund the cash consideration for Salesforce's acquisition of MuleSoft, Inc., along with associated fees and expenses. The filing also details the indenture agreements and the underwriting arrangement for this debt offering, as well as outlining the terms of a potential special mandatory redemption for the 2023 Notes if the MuleSoft acquisition does not close by April 20, 2019.

Key Highlights

  • 1Salesforce issued $2.5 billion in Senior Notes ( $1B in 2023 Notes and $1.5B in 2028 Notes).
  • 2The 2023 Notes carry a coupon of 3.250% and mature on April 11, 2023.
  • 3The 2028 Notes carry a coupon of 3.700% and mature on April 11, 2028.
  • 4Proceeds are earmarked to partially fund the acquisition of MuleSoft.
  • 5The 2023 Notes are subject to a special mandatory redemption at 101% of principal plus accrued interest if the MuleSoft acquisition does not close by April 20, 2019.
  • 6The 2028 Notes are not subject to this special mandatory redemption provision.
  • 7The debt is unsecured and unsubordinated, ranking equally with other senior unsecured debt of Salesforce.

Frequently Asked Questions

The primary purpose of this debt issuance is to provide partial funding for Salesforce's acquisition of MuleSoft, Inc. The proceeds will cover a portion of the cash consideration for the acquisition and related transaction costs.

Yes, the $1 billion in Senior Notes due 2023 are subject to a 'Special Mandatory Redemption' if the MuleSoft acquisition does not close on or before April 20, 2019. In that scenario, these notes would be redeemed at 101% of their principal amount plus accrued interest. The $1.5 billion in Senior Notes due 2028 are not subject to this specific redemption provision.

Salesforce issued $1 billion of Senior Notes due 2023 with a 3.250% annual interest rate and $1.5 billion of Senior Notes due 2028 with a 3.700% annual interest rate. Interest is payable semiannually. These notes are unsecured and unsubordinated debt obligations of Salesforce.

If the MuleSoft acquisition is not consummated, Salesforce expects to use the proceeds from the 2028 Notes for general corporate purposes and debt repayment. The 2023 Notes would be subject to the special mandatory redemption as described above.