Oracle 2013 Annual Report Download - page 114

Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2014
notes due July 2023 (2023 Notes). The 2019 Floating Rate Notes bear interest at a floating rate equal to three-month LIBOR plus 0.58% (0.81%
as of May 31, 2014) with interest payable quarterly. We issued these senior notes for general corporate purposes, which may include stock
repurchases, payment of cash dividends on our common stock and future acquisitions.
In October 2012, we issued $5.0 billion of fixed rate senior notes comprised of $2.5 billion of 1.20% notes due October 2017 (2017 Notes) and
$2.5 billion of 2.50% notes due October 2022 (2022 Notes).
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). 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 (July 2019 Notes) and $1.25 billion of 6.125% notes due July 2039 (2039 Notes).
In April 2008, we issued $5.0 billion of fixed rate senior notes, of which $1.25 billion of 4.95% senior notes was due and paid in April 2013, and
$2.5 billion of 5.75% senior notes due April 2018 (2018 Notes) and $1.25 billion of 6.50% senior notes due April 2038 (2038 Notes) remained
outstanding as of May 31, 2014.
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 January 2016 (2016 Notes) remained outstanding as of May 31, 2014.
The effective interest yields of the 2014 Notes, 2016 Notes, 2017 Notes, 2018 Notes, January 2019 Notes, July 2019 Notes, 2020 Notes, 2022
Notes, 2023 Notes, 2025 Notes, 2038 Notes, 2039 Notes and 2040 Notes (collectively and together with the 2021 Notes, the Senior Notes) at
May 31, 2014 were 3.75%, 5.32%, 1.24%, 5.76%, 2.44%, 5.05%, 3.93%, 2.51%, 3.73%, 3.17%, 6.52%, 6.19% and 5.45%, respectively. In July
2013, we entered into certain interest rate swap agreements that have the economic effect of modifying the fixed interest obligations associated
with the January 2019 Notes so that the interest payable on these notes effectively became variable (0.88% at May 31, 2014; see Note 11 for
additional
information). In September 2009, we entered into certain 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 (1.29% at
May 31, 2014; see Note 11 for additional information). The effective interest yield of the 2021 Notes was 2.33% (3.53% after the economic
effects of the cross-currency swap agreements described above and in Note 11). Interest is payable semi-
annually for the Senior Notes except for
the 2021 Notes and 2025 Notes for which interest is payable annually. We may redeem some or all of the Senior Notes of each series at any
time, subject to payment of an applicable make-whole premium. The 2019 Floating Rate Notes may not be redeemed prior to their maturity.
The Senior Notes and the 2019 Floating Rate 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 unsecured senior
indebtedness of Oracle Corporation. All existing and future liabilities of the subsidiaries of Oracle Corporation are or will be effectively senior to
the Senior Notes and the 2019 Floating Rate Notes and any future issuances of commercial paper notes. We were in compliance with all debt-
related covenants at May 31, 2014.
110