Oracle 2012 Annual Report Download - page 112

ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2012
In the third quarter of fiscal 2010, shortly after the closing of our acquisition of Sun we repaid, in full, $700
million of Sun’s legacy convertible notes.
Future principal payments for all of our borrowings at May 31, 2012 were as follows (in millions):
Fiscal 2013 ........................................................................ $ 2,950
Fiscal 2014 ........................................................................ —
Fiscal 2015 ........................................................................ 1,500
Fiscal 2016 ........................................................................ 2,000
Fiscal 2017 ........................................................................ —
Thereafter ......................................................................... 10,000
Total ......................................................................... $ 16,450
Commercial Paper Program & Commercial Paper Notes
We entered into a commercial paper program in February 2006 (amended in May 2008) via dealer agreements
with Banc of America Securities LLC and JP Morgan Securities, Inc. and an Issuing and Paying Agency
Agreement entered into in February 2006 with JPMorgan Chase Bank, National Association (CP Program). On
May 11, 2010, we reduced the overall capacity of our CP Program from $5.0 billion to $3.0 billion. Our ability to
issue commercial paper notes in the future is highly dependent upon our ability to provide a “back-stop” by
means of a revolving credit facility or other debt facility for amounts equal to or greater than the amounts of
commercial paper notes we intend to issue. While presently we have no such facilities in place that may provide
a back-stop to such commercial paper notes (see additional discussion under “Revolving Credit Agreements”
below), we currently believe that, if needed, we could put in place one or more additional revolving credit
facilities or other debt facility in a timely manner and on commercially reasonable terms.
During fiscal 2010, we issued $2.8 billion of unsecured short-term commercial paper notes pursuant to the CP
Program (none issued in fiscal 2012 and 2011). As of May 31, 2012 and 2011, we had no commercial paper
notes outstanding.
Revolving Credit Agreements
On May 29, 2012, we borrowed $1.7 billion pursuant to a revolving credit agreement with JPMorgan Chase
Bank, N.A., as initial lender and administrative agent; and J.P. Morgan Securities, LLC, as sole lead arranger and
sole bookrunner (the 2012 Credit Agreement). Interest for the 2012 Credit Agreement is based on either (x) a
“base rate” calculated as the highest of (i) JPMorgan’s prime rate, (ii) the federal funds effective rate plus 0.50%
and (iii) the LIBOR for deposits in U.S. Dollars plus 1%, or (y) LIBOR for deposits made in U.S. Dollars plus
0.35%, depending on the type of borrowings made by us. The effective interest rate of our borrowing under the
2012 Credit Agreement is 0.24% at May 31, 2012. This borrowing is due on July 2, 2012, which is the
termination date of the 2012 Credit Agreement.
The 2012 Credit Agreement contains certain customary representations, warranties and guarantees, and a
capitalization covenant. Events of default result in the requirement to pay additional interest. If any of the events
of default occur and are not cured, any unpaid amounts under the 2012 Credit Agreement may be declared
immediately due and payable and the 2012 Credit Agreement may be terminated. We were in compliance with
the 2012 Credit Agreement’s covenants as of May 31, 2012.
On May 27, 2011, we entered into two revolving credit agreements with BNP Paribas, as initial lender and
administrative agent, and BNP Paribas Securities Corp., as sole lead arranger and sole bookrunner (the 2011
Credit Agreements), and borrowed $1.15 billion pursuant to these agreements. During fiscal 2012, we repaid the
$1.15 billion and the 2011 Credit Agreements expired pursuant to their terms.
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