8-KMaterial AgreementsExhibits & Filings

QUALCOMM INC/DE 8-K Report, Material Agreement (May 31, 2017)

Filed May 31, 2017For Securities:QCOM

Summary

Qualcomm Incorporated (QCOM) filed an 8-K on May 31, 2017, detailing a significant financing transaction. The company executed an Officers' Certificate in conjunction with its Indenture, establishing terms for the sale of a substantial aggregate principal amount of both floating rate and fixed rate notes. This issuance totals over $8.25 billion, indicating a large-scale debt financing event undertaken by Qualcomm. The proceeds from a portion of these notes are specifically earmarked for the acquisition of NXP Semiconductors, a strategic move that was previously announced in October 2016. This filing provides crucial details about the terms, interest rates, and maturity dates of these various debt instruments, as well as the conditions under which the "Special Mandatory Redemption Notes" would be redeemed if the NXP acquisition does not proceed as planned.

Key Highlights

  • 1Qualcomm issued a significant amount of new debt, comprising both floating rate and fixed rate notes, totaling over $8.25 billion in aggregate principal amount.
  • 2The issuance includes nine distinct tranches of notes with varying maturity dates ranging from 2019 to 2047 and different interest rate structures (fixed or floating based on LIBOR).
  • 3A portion of the proceeds from specific notes (2019 and 2020 Floating Rate Notes, and 2019 and 2020 Fixed Rate Notes) are designated for the acquisition of NXP Semiconductors.
  • 4The company has established conditions for a "Special Mandatory Redemption" of certain notes if the NXP acquisition is not completed by a specified date or if the purchase agreement is terminated.
  • 5These newly issued notes are senior unsecured obligations of Qualcomm, ranking equally with other existing senior debt.
  • 6Customary events of default are outlined in the Indenture, including payment failures, covenant breaches, and bankruptcy/insolvency events, which could lead to acceleration of the debt.

Frequently Asked Questions

Qualcomm is issuing a total of $8,250,000,000 (over $8.25 billion) in aggregate principal amount of new notes across several tranches.

The net proceeds from the 2019 Floating Rate Notes, 2020 Floating Rate Notes, 2019 Fixed Rate Notes, and 2020 Fixed Rate Notes (collectively, the "Special Mandatory Redemption Notes") are intended to be used to finance the acquisition of NXP Semiconductors, pay associated transaction fees, and potentially repurchase NXP's convertible notes. Other notes may be used for general corporate purposes or other unspecified uses.

If the NXP acquisition does not close by a specified date (originally October 27, 2017, with potential extensions) or if the purchase agreement is terminated, Qualcomm is obligated to redeem all of the "Special Mandatory Redemption Notes" at 101% of their aggregate principal amount, plus accrued interest. This offers a level of protection to investors in those specific notes.

The notes have a range of interest rates and maturity dates. For example, the 2019 Fixed Rate Notes bear interest at 1.850% and mature on May 20, 2019. The 2047 Fixed Rate Notes bear interest at 4.300% and mature on May 20, 2047. Floating rate notes have interest rates tied to three-month LIBOR plus a spread, with maturities in 2019, 2020, and 2023.