Oracle 2007 Annual Report Download - page 93

Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2008
Commercial Paper Program
In March 2008, we increased our commercial paper program to $5.0 billion from $3.0 billion (the CP Program). The
original dealer agreements entered into in February 2006 with each of Banc of America Securities LLC, JP Morgan
Securities Inc., Lehman Brothers Inc., Merrill Lynch Money Markets Inc. and Merrill Lynch Pierce, Fenner & Smith
Incorporated and the Issuing and Paying Agency Agreement entered into in February 2006 with JPMorgan Chase
Bank, National Association, remain in effect and were not changed. Under the CP Program, we may issue and sell
unsecured short-term promissory notes (Commercial Paper Notes) pursuant to a private placement exemption from
the registration requirements under federal and state securities laws. In fiscal 2008 and 2007, we issued
approximately $1.2 billion and $2.1 billion of Commercial Paper Notes, respectively, of which none and $1.4 billion
remained outstanding as of May 31, 2008 and 2007, respectively. As of May 31, 2008, we had $5.0 billion of
capacity remaining under our CP Program.
Senior Notes
In April 2008, we issued $5.0 billion of fixed rate senior notes, of which $1.25 billion of 4.95% senior notes is due
April 2013 (2013 Notes), $2.5 billion of 5.75% senior notes is due April 2018 (2018 Notes), and $1.25 billion of
6.50% senior notes is due April 2038 (2038 Notes). We issued these senior notes to finance the acquisition of BEA
and for general corporate purposes. Some or all of the 2013 Notes, 2018 Notes and 2038 Notes may be redeemed at
any time, subject to payment of a make-whole premium. The 2013 Notes, 2018 Notes and 2038 Notes pay interest
semi-annually.
In May 2007, we issued $2.0 billion of floating rate senior notes, of which $1.0 billion is due May 2009 (New 2009
Notes) and $1.0 billion is due May 2010 (2010 Notes). We issued the New 2009 Notes and 2010 Notes to fund the
redemption of the $1.5 billion of senior floating rate notes that we issued in fiscal 2006 (see below) and for general
corporate purposes. The New 2009 Notes and 2010 Notes bear interest at a rate of three-month USD LIBOR plus
0.02% and 0.06%, respectively, and interest is payable quarterly. The New 2009 Notes and 2010 Notes may not be
redeemed prior to their maturity.
In January 2006, we issued $5.75 billion of senior notes consisting of $1.5 billion of floating rate senior notes due
2009 (Original 2009 Notes), $2.25 billion of 5.00% senior notes due 2011 (2011 Notes) and $2.0 billion of
5.25% senior notes due 2016 (2016 Notes and together with the Original 2009 Notes and the 2011 Notes, Original
Senior Notes) to finance the Siebel acquisition and for general corporate purposes. On June 16, 2006, we completed a
registered exchange offer of the Original Senior Notes for registered senior notes with substantially identical terms to
the Original Senior Notes.
In May 2007, we redeemed the Original 2009 Notes for their principal amount plus accrued and unpaid interest. Our
2011 Notes and 2016 Notes may also be redeemed at any time, subject to payment of a make-whole premium.
Interest is payable semi-annually for the 2011 notes and 2016 notes.
The effective interest yields of the New 2009 Notes, 2010 Notes, 2011 Notes, 2013 Notes, 2016 Notes, 2018 Notes
and 2038 Notes (collectively, the Senior Notes) at May 31, 2008 were 2.70%, 2.74%, 5.08%, 4.96%, 5.33%, 5.76%
and 6.52%, respectively. In September 2007, we entered into two interest rate swap agreements that have the
economic effect of modifying the variable interest obligations associated with the New 2009 Notes and 2010 Notes
so that the interest payable on the senior notes effectively became fixed at a rate of 4.62% and 4.59%, respectively
(see Note 9 for additional information).
The Senior Notes rank pari passu with any Commercial Paper Notes that we issue and all existing and future senior
indebtedness of Oracle Corporation. All existing and future liabilities of the subsidiaries of Oracle Corporation will
be effectively senior to the Senior Notes and any Commercial Paper Notes that we issue.
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Source: ORACLE CORP, 10-K, July 02, 2008 Powered by Morningstar® Document Research℠