Qualcomm accepts tenders, exchange for three series of buyout notes

By Susanna Moon

Chicago, May 29 – Qualcomm Inc. announced the results of its exchange offer and tender offer for four series of notes in connection with the planned acquisition of NXP Semiconductors NV.

The company accepted for exchange and for purchase all of the tendered notes for the first three series of notes and none of the fourth series, according to two separate company announcements.

As announced May 21 the company was offering to exchange $4 billion of four series of its notes until 5 p.m. ET on May 25, with a minimum tender condition for one of the issues.

The four series of outstanding notes are intended to finance the acquisition and contain provisions that will require Qualcomm to redeem the notes at 101% of par if the acquisition has not closed before 11:59 p.m. ET on June 1 or if the related purchase agreement is terminated beforehand, according to a previous company release.

As a result, Qualcomm was offering to some holders the chance to exchange the notes for four new series of notes that contain a provision requiring Qualcomm to redeem the new notes if the acquisition has not closed by Nov. 1.

Holders had tendered the following amount of notes for exchange at a price of par amount of new notes and $2.50 in cash for each $1,000 principal amount:

• $52,338,000 of the $750 million floating-rate notes due May 20, 2019 for new notes due May 21, 2019 and all of those notes were accepted for exchange;

• $14,506,000 of the $500 million floating-rate notes due May 20, 2020 for new notes due May 21, 2020 and all of those notes were accepted for exchange;

• $56,205,000 of the $1.25 billion 1.85% notes due May 20, 2019 for new notes due May 21, 2019 and all of those notes were accepted for exchange;

• $119,959,000 of the $1.5 billion 2.1% notes due May 20, 2020 for new notes due May 21, 2020, subject to a minimum condition of $300 million, and none of those notes were accepted for exchange.

No consents were being solicited as part of the exchange offers and there was no overall minimum condition, although the exchange for the 2.1% notes due 2020 did contain a minimum condition.

To participate, holders must be qualified institutional buyers or non-U.S. persons other than retail investors in the European economic area and investors in Canada who are not both accredited investors and permitted clients, the release noted.

At the same time, Qualcomm also was offering to repurchase the four series of notes under cash tender offers, which also will run until 5 p.m. ET on May 25.

The tender was being made only holders who are not qualified institutional buyers and not non-U.S. persons other than retail investors in the European economic area and investors in Canada who are not both accredited investors and permitted clients, according to a separate announcement issued by the company at the start of the offer.

In the tender offer, the company was offering to purchase the notes at a price of $1,002.50 in cash per $1,000 principal amount plus accrued interest to but excluding the settlement date.

Holders had tendered for purchase $2.67 million of the floaters due 2019, $1.1 million floaters due 2020, $67,427,000 of the 1.85% notes and $105.89 million of the 2.1% notes, according to a separate update.

As in the exchange, the issuer said it accepted all of the first three series and none of the 2.1% notes because it failed to meet the minimum condition.

Goldman Sachs & Co. LLC (800 828-3182 or 212 902-6941) and Barclays (800 438-3242 or 212 528-7581) are the joint lead dealer managers. For questions, call Global Bondholder Services Corp. (866 470-3900 or 212 430-3774).

Qualcomm said it may redeem the 1.85% notes due 2019 and the 2.1% notes due 2020 at any time under the make-whole call provision and plans to exercise that option if the conditions to the acquisition are not likely to be met by June 1.

The issuer said it expects to redeem those notes at par.

Settlement is expected to occur May 31.

For the exchange, Global Bondholder Services Corp. (866 470-3900, 212 430-3774 or gbsc-usa.com/eligibility/QUALCOMM) is the exchange agent and information agent.

The San Diego-based company designs, develops, manufactures and markets wireless telecommunications products and services.

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