Microsoft Corp. (NASDAQ: MSFT) ("Microsoft") today announced the commencement of offers to (i) exchange (the "Pool 1 Offer") the fourteen series of notes described in the table below (collectively, the "Pool 1 Notes") for a new series of Microsoft's notes due March 17, 2052 (the "New 2052 Notes") and a cash payment, as applicable, and (ii) exchange (the "Pool 2 Offer" and, together with the Pool 1 Offer, the "Exchange Offers") the four series of notes described in the table below (collectively, the "Pool 2 Notes" and, together with the Pool 1 Notes, the "Existing Notes") for a new series of Microsoft's notes due March 17, 2062 (the "New 2062 Notes" and, together with the New 2052 Notes, the "New Notes") and a cash payment, as applicable.
A Registration Statement on Form S-4, including a prospectus (the "Prospectus"), which is subject to change, relating to the issuance of the New Notes has been filed with the Securities and Exchange Commission (the "SEC") on Feb. 16, 2021 (the "Registration Statement"), but has not yet become effective. The New Notes may not be sold nor may offers to buy be accepted prior to the time the Registration Statement becomes effective. If and when issued, the New Notes will be registered under the Securities Act of 1933, as amended. The aggregate principal amount of Pool 1 Notes of each series that are accepted for exchange will be based on the order of acceptance priority for such series as set forth in the table below, and such that the aggregate principal amount of Pool 1 Notes accepted in the Pool 1 Offer results in the issuance of New 2052 Notes in an amount not exceeding $6,250,000,000 (the "New 2052 Notes Issue Cap"). The Pool 1 Notes are as follows:
| Pool 1 Table | |||||||
| Title of Security | CUSIP Number |
Principal Amount Outstanding (MM) | Acceptance Priority Level | Reference UST Security (1) | Fixed Spread (basis points) | Cash Payment Percent of Premium (2) | Early Exchange Premium (3) (4) |
| 4.875% Notes due 2043 | 594918AX2 | $174.572 | 1 | 30-year | +45 | 100% | $30 |
| 4.450% Notes due 2045 | 594918BL7 | $1,288.337 | 2 | 30-year | +50 | 100% | $30 |
| 4.250% Notes due 2047 | 594918CA0 | $1,584.630 | 3 | 30-year | +55 | 100% | $30 |
| 5.300% Notes due 2041 | 594918AM6 | $770.339 | 4 | 30-year | +30 | 100% | $30 |
| 5.200% Notes due 2039 | 594918AD6 | $558.545 | 5 | 30-year | +20 | 100% | $30 |
| 4.500% Notes due 2040 | 594918AJ3 | $571.171 | 6 | 30-year | +25 | 100% | $30 |
| 3.700% Notes due 2046 | 594918BT0 | $4,500.000 | 7 | 30-year | +52 | 100% | $30 |
| 3.750% Notes due 2043 | 594918AU8 | $244.015 | 8 | 30-year | +45 | 100% | $30 |
| 3.750% Notes due 2045 | 594918BD5 | $640.567 | 9 | 30-year | +45 | 100% | $30 |
| 3.500% Notes due 2042 | 594918AR5 | $900.000 | 10 | 30-year | +35 | 100% | $30 |
| 4.100% Notes due 2037 | 594918BZ6 | $1,916.467 | 11 | 30-year | +5 | 100% | $30 |
| 4.200% Notes due 2035 | 594918BK9 | $1,000.000 | 12 | 30-year | -10 | 100% | $30 |
| 3.450% Notes due 2036 | 594918BS2 | $2,250.000 | 13 | 30-year | -7 | 100% | $30 |
| 3.500% Notes due 2035 | 594918BC7 | $1,500.000 | 14 | 30-year | -15 | 100% | $30 |
(1) The "30-year Reference UST Security" refers to the 1.625% U.S. Treasury Notes due Nov. 15, 2050.
(2) The "Cash Payment Percent of Premium" is the percent (as set forth with respect to each series of Pool 1 Notes in the table above) of the amount by which the Total Exchange Consideration (as defined below and calculated at the Pricing Time (as defined below)) exceeds $1,000 per $1,000 principal amount of such Pool 1 Notes.
(3) Per $1,000 principal amount of Pool 1 Notes.
(4) Holders who validly tender Pool 1 Notes after the Early Exchange Time (as defined below) but on or before the Expiration Time (as defined below) will not be eligible to receive the "Early Exchange Premium" of $30 principal amount of New 2052 Notes for each $1,000 principal amount of Pool 1 Notes validly tendered and not validly withdrawn. For the avoidance of doubt, the $30 per $1,000 Early Exchange Premium is included within the Total Exchange Consideration, as calculated using the Fixed Spread over the 30-year Reference UST Security as described herein, and is not in addition to the Total Exchange Consideration.
The aggregate principal amount of Pool 2 Notes of each series that are accepted for exchange will be based on the order of acceptance priority for such series as set forth in the table below, and such that the aggregate principal amount of Pool 2 Notes accepted in the Pool 2 Offer results in the issuance of New 2062 Notes in an amount not exceeding $1,250,000,000 (the "New 2062 Notes Issue Cap" and, together with the New 2052 Notes Issue Cap, the "New Notes Issue Cap"). The Pool 2 Notes are as follows:
| Pool 2 Table | |||||||
| Title of Security | CUSIP Number |
Principal Amount Outstanding (MM) | Acceptance Priority Level | Reference UST Security (1) | Fixed Spread (basis points) | Cash Payment Percent of Premium (2) | Early Exchange Premium (3) (4) |
| 3.950% Notes due 2056 | 594918BU7 | $1,954.510 | 1 | 30-year | +67 | 88% | $30 |
| 4.750% Notes due 2055 | 594918BM5 | $326.735 | 2 | 30-year | +67 | 72% | $30 |
| 4.500% Notes due 2057 | 594918CB8 | $883.777 | 3 | 30-year | +67 | 72% | $30 |
| 4.000% Notes due 2055 | 594918BE3 | $793.850 | 4 | 30-year | +67 | 94% | $30 |
(1) The "30-year Reference UST Security" refers to the 1.625% U.S. Treasury Notes due Nov. 15, 2050.
(2) The "Cash Payment Percent of Premium" is the percent (as set forth with respect to each series of Pool 2 Notes in the table above) of the amount by which the Total Exchange Consideration (calculated at the Pricing Time) exceeds $1,000 per $1,000 principal amount of such Pool 2 Notes.
(3) Per $1,000 principal amount of Pool 2 Notes.
(4) Holders who validly tender Pool 2 Notes after the Early Exchange Time but on or before the Expiration Time will not be eligible to receive the "Early Exchange Premium" of $30 principal amount of New 2062 Notes for each $1,000 principal amount of Pool 2 Notes validly tendered and not validly withdrawn. For the avoidance of doubt, the $30 per $1,000 Early Exchange Premium is included within the Total Exchange Consideration, as calculated using the Fixed Spread over the 30-year Reference UST Security as described herein, and not in addition to the Total Exchange Consideration.
