Oracle 2012 Annual Report Download - page 111

ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2012
Senior Notes and Other
In July 2010, we issued $3.25 billion of fixed rate senior notes comprised of $1.0 billion of 3.875% notes due
July 2020 (2020 Notes) and $2.25 billion of 5.375% notes due July 2040 (2040 Notes, and together with the 2020
Notes, the Original Senior Notes). We issued the Original Senior Notes in order to repay indebtedness, including
the repayment of $2.25 billion of 5.00% senior notes that matured and were repaid in January 2011, for general
corporate purposes, for future acquisitions and in order to replenish cash used to repay $1.0 billion of floating
rate senior notes that matured in May 2010. As part of the offering of the Original Senior Notes, we entered into
a registration rights agreement with the initial purchasers for the benefit of the holders of the Original Senior
Notes in which we agreed to file with the SEC a registration statement with respect to senior notes identical in all
material respects to the Original Senior Notes within fourteen months after the issue date of the Original Senior
Notes and on December 16, 2011 we completed a registered offer to exchange the Original Senior Notes for new
freely tradable notes having terms substantially identical to the Original Senior Notes. An aggregate of $994
million principal amount of the 2020 Notes and an aggregate of $2.24 billion principal amount of the 2040 Notes
were tendered and exchanged in the offer.
In July 2009, we issued $4.5 billion of fixed rate senior notes comprised of $1.5 billion of 3.75% notes due July
2014 (2014 Notes), $1.75 billion of 5.00% notes due July 2019 (2019 Notes) and $1.25 billion of 6.125% notes
due July 2039 (2039 Notes). We issued these senior notes for general corporate purposes and for our acquisition
of Sun and acquisition related expenses.
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 for general corporate
purposes and for acquisitions and acquisition related expenses.
In May 2007, we issued $2.0 billion of floating rate senior notes, of which $1.0 billion was due and paid in May
2009 and $1.0 billion was due and paid in May 2010. We had also entered into certain variable to fixed interest
rate swap agreements related to these senior notes, which settled as of the same dates the notes were repaid (see
Note 11).
In January 2006, we issued $5.75 billion of senior notes, of which $2.25 billion of 5.00% senior notes was due
and paid in January 2011 and $2.0 billion of 5.25% senior notes due 2016 (2016 Notes) remained outstanding as
of May 31, 2012.
The effective interest yields of the 2013 Notes, 2014 Notes, 2016 Notes, 2018 Notes, 2019 Notes, 2020 Notes,
2038 Notes, 2039 Notes and 2040 Notes (collectively, the Senior Notes) at May 31, 2012 were 4.96%, 3.75%,
5.32%, 5.76%, 5.05%, 3.90%, 6.52%, 6.19% and 5.45%, respectively. Interest is payable semi-annually for the
Senior Notes. In September 2009, we entered into interest rate swap agreements that have the economic effect of
modifying the fixed interest obligations associated with the 2014 Notes so that the interest payable on these notes
effectively became variable (1.39% at May 31, 2012; see Note 11 for additional information). All of the Senior
Notes may be redeemed at any time, subject to payment of make-whole premiums for each series.
The Original Senior Notes and Senior Notes rank pari passu with any other notes we may issue in the future
pursuant to our commercial paper program (see additional discussion regarding our commercial paper program
below) and all existing and future senior indebtedness of Oracle Corporation. All existing and future liabilities of
the subsidiaries of Oracle Corporation are effectively senior to the Original Senior Notes, Senior Notes and any
of our commercial paper notes.
In the third quarter of fiscal 2012, shortly after the closing of our acquisition of RightNow, we repaid, in full,
$255 million of RightNow’s legacy convertible notes.
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