Titan database software Oracle (NYSE: ORCL) has raised $ 15 billion in additional long-term debt. Oracle will settle the debt offer on Wednesday, March 24th.
Offer Oracle debt with the numbers
The offer is subscribed by a group of five global money exchange banks. When it closes, Oracle ‘s long – term debt will rise from $ 63.5 billion to $ 78.5 billion. The company’s cash on hand will also jump from $ 22.3 billion to $ 37.3 billion. Oracle has generated $ 12.1 billion of free cash flows over the last four quarters, to put those numbers in sight.
The additional debt is structured as six installments of high notes with appropriate dates between 2026 and 2061. The short-term papers come with an annual coupon rate of 1.65%, while the short-term interest rate is 4.1%. notes 2061. The other passages fall between those edges.
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These interest rates compare favorably with Oracle’s long-term debt contracts. The lowest among the 34 types of fixed and floating notes on Oracle’s balance sheet for fiscal year 2020 was an upcoming 5-year note in September 2021 at an annual coupon rate of 1.9%. The highest rate was 6.5% for the 30-year note payable in 2038.
Oracle will use the money from this offer for general corporate purposes. These reasons can include paying down some of the debt with higher interest. Other options include Oracle split policy financing, buy back shares, or property financing. In last week’s third quarter report and employment call, Oracle management did not discuss their fundraising or capital management plans. The next report will show just how Oracle will deliver the $ 15 billion cash distribution.
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