Qualcomm Incorporated (NASDAQ: QCOM) announced today the commencement of a transaction to exchange four series of its outstanding notes totaling $4 billion as detailed below. While Qualcomm remains committed to the acquisition (the “Acquisition”) of NXP Semiconductors N.V. (“NXP”), it is uncertain if the Acquisition will be consummated on or before June 1, 2018. The four series of outstanding notes are intended to finance the Acquisition and contain provisions that will require Qualcomm to redeem such notes if the Acquisition has not been consummated on or before June 1, 2018 or if the related purchase agreement is terminated beforehand. As a result, Qualcomm is offering to certain holders of such notes the opportunity to exchange those notes for four new series of notes that contain a provision requiring Qualcomm to redeem such new notes if the Acquisition has not been consummated on or before November 1, 2018 (instead of June 1, 2018).
Only holders who are “qualified institutional buyers” or who are non-U.S. persons (other than “retail investors” in the European Economic Area and investors in any province or territory of Canada that are individuals or that are institutions or other entities that do not qualify as both “accredited investors” and “permitted clients”) are eligible to participate in this transaction, as more fully described below. Concurrently with this transaction, Qualcomm also announced today the commencement of a transaction to repurchase such four series of notes pursuant to cash tender offers (each, a “Cash Offer” and collectively, the “Cash Offers”), which are open only to holders who are not eligible to participate in the exchange transaction.
The exchange transaction consists of four separate private offers to exchange (each, an “Exchange Offer” and collectively, the “Exchange Offers”), any and all of the outstanding notes listed in the table below (collectively, the “Old Notes”). Each of the Old Notes contains a special mandatory redemption (“SMR”) provision which requires Qualcomm to redeem the Old Notes at a redemption price equal to 101% of the aggregate principal amount of the Old Notes, plus accrued and unpaid interest to, but excluding, the date of such special mandatory redemption, if the Acceptance Time, as defined in the Purchase Agreement, dated October 27, 2016 (as amended, the “Purchase Agreement”), by and between Qualcomm River Holdings B.V., an indirect, wholly owned subsidiary of Qualcomm and NXP, has not occurred on or before 11:59 p.m., New York City time on June 1, 2018 (the “SMR Date”) or if, prior to such date, the Purchase Agreement is terminated. Qualcomm is offering to exchange each of the four series of Old Notes for (i) four new series of Qualcomm’s senior notes which will each have an SMR Date of November 1, 2018, which is five months after the SMR Date of the applicable series of Old Notes; and (ii) cash, on the terms and subject to the conditions set forth in the Offering Memorandum dated May 21, 2018 (the “Offering Memorandum” and, together with the eligibility letter, the Canadian holder form and the notice of guaranteed delivery, the “Exchange Offer Documents”). No consents are being solicited as part of the Exchange Offers and no overall minimum condition exists for the Exchange Offers, although the Exchange Offer for the 2.100% Notes due 2020 may be subject to a minimum condition as set forth in the table below.
The Exchange Offers are only made, the New Notes are only being offered and will only be issued, and copies of the Offering Memorandum will only be made available, to a holder of Old Notes who has certified its status as either (a) a “qualified institutional buyer” as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) or (b) (i) a person who is not a “U.S. person” as defined under Regulation S under the Securities Act, or a dealer or other professional fiduciary organized, incorporated or (if an individual) residing in the United States holding a discretionary account or similar account (other than an estate or trust) for the benefit or account of a non-“U.S. person”, (ii) if located or resident in the European Economic Area, that they are persons other than “retail investors” (for these purposes, a retail investor means a person who is one (or more) of: (x) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”); or (y) a customer within the meaning of Directive 2002/92/EC (as amended, the “Insurance Mediation Directive”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (z) not a qualified investor as defined in Directive 2003/71/EC (as amended, the “Prospectus Directive”)) and (iii) if located or resident in any province or territory of Canada, is not an individual and is an “accredited investor” as such term is defined in National Instrument 45-106 of the Canadian Securities Administrators or section 73.3(1) of the Securities Act (Ontario), and in each case, is also a “permitted client” as defined in National Instrument 31- 103 of the Canadian Securities Administrators (“Canadian Eligible Holders”). Qualcomm refers to holders of Old Notes who certify to Qualcomm that they are eligible to participate in the Exchange Offers pursuant to at least one of the foregoing conditions as “Exchange Offer Eligible Holders”.
Only Exchange Offer Eligible Holders who have confirmed they are Exchange Offer Eligible Holders via the eligibility letter are authorized to receive or review the Exchange Offer Documents or to participate in the Exchange Offers. For Canadian Eligible Holders, such participation is also conditioned upon the receipt of the Canadian holder form. There is no separate letter of transmittal in connection with the Offering Memorandum.