8-KMaterial AgreementsExhibits & Filings

CISCO SYSTEMS, INC. 8-K Report, Material Agreement (Feb 24, 2016)

Filed February 24, 2016For Securities:CSCO

Summary

Cisco Systems, Inc. (CSCO) has filed an 8-K report detailing its entry into a material definitive agreement concerning an underwritten public offering of senior notes. This offering, expected to be completed by February 29, 2016, involves the issuance of various debt securities totaling a significant aggregate principal amount across different maturity dates and interest rates. The proceeds from this offering are intended to bolster Cisco's capital structure and provide financial flexibility. Investors should note the specific terms of the notes, including their principal amounts, interest rates (both fixed and floating), maturity dates, and redemption provisions. The issuance comprises Floating Rate Notes due 2018, and fixed-rate senior notes maturing in 2018, 2019, 2021, 2023, and 2026. The company has engaged a syndicate of reputable underwriters to facilitate this debt issuance, which is registered under the Securities Act of 1933.

Key Highlights

  • 1Cisco entered into an underwriting agreement for a public offering of senior notes on February 22, 2016.
  • 2The offering is expected to close on February 29, 2016.
  • 3Total principal amount across all notes is significant, with various maturities ranging from 2018 to 2026.
  • 4Issued notes include $1 billion in Floating Rate Notes due 2018 (3-month LIBOR + 0.600%).
  • 5Fixed-rate notes issued include varying amounts and rates for maturities in 2018 ($1.25B at 1.400%), 2019 ($1B at 1.600%), 2021 ($2.5B at 2.200%), 2023 ($500M at 2.600%), and 2026 ($750M at 2.950%).
  • 6The notes are unsecured and will rank equally with other senior unsecured indebtedness, but junior to liabilities of subsidiaries.
  • 7The offering is backed by a syndicate of well-known underwriters, including Barclays Capital Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Wells Fargo Securities, LLC.

Frequently Asked Questions

While the 8-K filing does not explicitly state the purpose of the debt offering, companies typically issue debt to fund operations, capital expenditures, acquisitions, share repurchases, or for general corporate purposes. This offering likely aims to enhance Cisco's financial flexibility and manage its capital structure.

The offering includes $1 billion in Floating Rate Notes due February 21, 2018, priced at 3-month LIBOR plus 0.600%. Additionally, fixed-rate notes are being issued: $1.25 billion due 2018 at 1.400%, $1 billion due 2019 at 1.600%, $2.5 billion due 2021 at 2.200%, $500 million due 2023 at 2.600%, and $750 million due 2026 at 2.950%.

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

The Floating Rate Notes due 2018 are not redeemable by the company. However, the fixed-rate senior notes are redeemable at Cisco's option, in whole or in part, at a 'make-whole premium' price, which is determined based on the present value of remaining payments discounted at a rate tied to Treasury rates plus a specified basis point spread that varies by maturity.