Summary
Oracle Corporation (ORCL) filed an 8-K on May 14, 2010, detailing a significant financial transaction. The company issued $800 million in short-term promissory notes under its commercial paper program, with maturities ranging from one to two months. These new notes, along with existing short-term debt, are intended to help fund the repayment of a $1.0 billion floating rate senior note maturing in May 2010. This filing indicates Oracle's active management of its short-term debt obligations and its capacity to raise capital through its commercial paper program. While the new notes carry a slightly higher yield than existing ones, both remain very low, reflecting favorable borrowing conditions for the company at the time. Investors should note the reduction in the overall commercial paper program capacity from $5.0 billion to $3.0 billion, which followed the termination of a revolving credit facility.
Key Highlights
- 1Issued $800 million in short-term promissory notes (New CP Notes) on May 12, 2010.
- 2New CP Notes have maturities of one to two months.
- 3Weighted average yield on New CP Notes, including costs, was 0.285%.
- 4Total short-term promissory notes outstanding (including existing) is $1.0813 billion.
- 5Remaining capacity under the $3.0 billion commercial paper program is approximately $1.9 billion.
- 6Funds are intended to repay $1.0 billion of senior notes due May 2010.
- 7Reduced overall commercial paper program capacity from $5.0 billion to $3.0 billion in March 2010.