8-KMaterial AgreementsExhibits & Filings

CISCO SYSTEMS, INC. 8-K Report, Material Agreement (Mar 15, 2011)

Filed March 15, 2011For Securities:CSCO

Summary

Cisco Systems, Inc. (CSCO) filed an 8-K on March 15, 2011, to report the entry into a material definitive agreement regarding a public offering of senior notes. The company entered into an underwriting agreement with several major financial institutions, including Goldman, Sachs & Co., J.P. Morgan Securities LLC, and Merrill Lynch, Pierce, Fenner & Smith Incorporated. This offering aims to raise substantial capital through the issuance of three types of senior notes. The offering is expected to be completed on March 16, 2011, and will result in the issuance of Floating Rate Notes due 2014 totaling $1.25 billion, 1.625% Senior Notes due 2014 totaling $2 billion, and 3.150% Senior Notes due 2017 totaling $750 million. These notes are unsecured and will rank equally with existing senior unsecured indebtedness, but junior to liabilities of subsidiaries. The proceeds from this offering will provide Cisco with additional financial flexibility.

Key Highlights

  • 1Cisco entered into an underwriting agreement on March 9, 2011, for a public offering of senior notes.
  • 2The offering includes $1.25 billion in Floating Rate Notes due 2014, priced at three-month LIBOR plus 0.25%.
  • 3The company will issue $2 billion in 1.625% Senior Notes due 2014.
  • 4An additional $750 million in 3.150% Senior Notes due 2017 will also be issued.
  • 5The notes are unsecured and rank equally with other senior unsecured debt, but subordinate to subsidiary liabilities.
  • 6The Indenture includes covenants related to liens, sale-leaseback transactions, and mergers, along with customary events of default.
  • 7The offering is expected to close on March 16, 2011, with The Bank of New York Mellon Trust Company, N.A. serving as trustee.

Frequently Asked Questions

This 8-K filing announces Cisco Systems, Inc.'s entry into a material definitive agreement for a public offering of senior notes. It details the terms of the notes being issued and the underwriting agreement related to their sale.

Cisco is raising a total of $4 billion through this debt offering, consisting of $1.25 billion in Floating Rate Notes due 2014, $2 billion in 1.625% Senior Notes due 2014, and $750 million in 3.150% Senior Notes due 2017.

The notes include: (1) $1.25 billion in Floating Rate Notes due March 14, 2014, with interest at three-month LIBOR plus 0.25%; (2) $2 billion in 1.625% Senior Notes due March 14, 2014; and (3) $750 million in 3.150% Senior Notes due March 14, 2017. The 2014 Fixed Rate Notes and 2017 Fixed Rate Notes are redeemable at the company's option with a make-whole premium.

The new senior notes are unsecured and will rank equally in right of payment with all of Cisco's other existing and future senior unsecured indebtedness. However, they will structurally rank junior to all liabilities of Cisco's subsidiaries.