8-KMaterial AgreementsFinancial EventsExhibits & Filings

CISCO SYSTEMS, INC. 8-K Report, Material Agreement (Feb 13, 2009)

Filed February 13, 2009For Securities:CSCO

Summary

Cisco Systems, Inc. (CSCO) filed an 8-K on February 13, 2009, to report the entry into a material definitive agreement concerning a public offering of senior notes. The company entered into an underwriting agreement on February 9, 2009, for an offering that was expected to close on February 17, 2009. This offering involved the issuance of two tranches of investment-grade notes: $2 billion of 4.95% Senior Notes due 2019 and $2 billion of 5.90% Senior Notes due 2039, totaling $4 billion in debt. The issuance of these notes represents a significant capital raise for Cisco, likely to fund general corporate purposes and provide financial flexibility. The notes are unsecured, ranking equally with other senior unsecured indebtedness, but junior to subsidiary liabilities. The filing outlines the terms, interest rates, maturity dates, and redemption provisions, including a "make-whole premium" for early redemption. The inclusion of customary covenants and events of default in the Indenture provides investors with certain protections.

Key Highlights

  • 1Cisco entered into an underwriting agreement on February 9, 2009, for a public offering of senior notes.
  • 2The offering aimed to raise approximately $4 billion through the sale of two tranches of notes.
  • 3A total of $2 billion in 4.95% Senior Notes due February 15, 2019, were issued.
  • 4A total of $2 billion in 5.90% Senior Notes due February 15, 2039, were issued.
  • 5The notes bear fixed interest rates of 4.95% and 5.90% respectively, payable semi-annually.
  • 6The notes are unsecured and rank equally with other senior unsecured debt, but junior to subsidiary obligations.
  • 7The underwriting agreement and related Indenture include customary terms, covenants, and events of default for debt offerings.

Frequently Asked Questions

This 8-K filing is primarily to announce Cisco Systems' entry into a material definitive agreement related to a public offering of senior notes. It details the terms of the underwriting agreement and the planned issuance of $4 billion in aggregate principal amount of investment-grade debt securities.

Cisco is issuing $2 billion of 4.95% Senior Notes due 2019 and $2 billion of 5.90% Senior Notes due 2039. Both note series will pay interest semi-annually, and they are redeemable at the company's option, subject to a 'make-whole premium'.

This offering represents a significant debt issuance, raising $4 billion in capital. This capital is likely intended for general corporate purposes, providing Cisco with financial flexibility, potentially for investments, acquisitions, or to manage its existing debt structure, especially given the economic conditions at the time.

The Senior Notes are unsecured and will rank equally with Cisco's other existing and future senior unsecured indebtedness. However, they will effectively rank junior to all liabilities of Cisco's subsidiaries.