Microsoft Announces Expiration and Final Results of its Private Exchange Offers and Consent Solicitations

REDMOND, Wash., Nov. 14, 2023 /PRNewswire/ -- Microsoft Corporation (Nasdaq: MSFT) ("Microsoft") today announced the final results of its previously announced offers to Eligible Holders (as defined herein) to exchange (each an "Exchange Offer" and collectively, the "Exchange Offers") any and all outstanding notes issued by Activision Blizzard, Inc., a wholly-owned subsidiary of Microsoft ("Activision Blizzard") as set forth in the table below (the "Existing Activision Blizzard Notes") for (1) up to $3,650,000,000 aggregate principal amount of new notes issued by Microsoft (the "New Microsoft Notes") and (2) cash. The following table sets forth the aggregate principal amount of each series of Existing Activision Blizzard Notes that were validly tendered and not validly withdrawn after 5:00 p.m., New York City time, on October 27, 2023 (the "Early Tender Date") but at or before 5:00 p.m., New York City time, on November 14, 2023 (the "Expiration Date"):

The Exchange Offers and the related previously completed consent solicitations (the "Consent Solicitations") were made pursuant to the terms and subject to the conditions set forth in the offering memorandum and consent solicitation statement dated as of October 16, 2023 (the "Offering Memorandum and Consent Solicitation Statement"). The final settlement of the Exchange Offers is expected to take place on or about November 16, 2023 (the "Final Settlement").

In connection with the Final Settlement, Microsoft expects to issue the following additional amounts of New Microsoft Notes: $205,000 aggregate principal amount of 3.400% Notes due 2026 (the "Final Settlement 2026 Notes"); $1,610,000 aggregate principal amount of 3.400% Notes due 2027 (the "Final Settlement 2027 Notes"); $5,743,000 aggregate principal amount of 1.350% Notes due 2030 (the "Final Settlement 2030 Notes"); $2,972,000 aggregate principal amount of 4.500% Notes due 2047 (the "Final Settlement 2047 Notes"); and $1,070,000 aggregate principal amount of 2.500% Notes due 2050 (the "Final Settlement 2050 Notes" and, together with the Final Settlement 2026 Notes, the Final Settlement 2027 Notes, the Final Settlement 2030 Notes and the Final Settlement 2047 Notes, the "Final Settlement Notes").

The Final Settlement Notes will be governed by an indenture, dated as of May 18, 2009 (the "Base Indenture"), between Microsoft, as issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee (the "New Microsoft Notes Trustee"), as supplemented by the Fifteenth Supplemental Indenture, dated as of November 6, 2023 (the "Fifteenth Supplemental Indenture"), between Microsoft and the New Microsoft Notes Trustee.

The Final Settlement Notes will be Microsoft's senior unsecured obligations and rank equally with Microsoft's other unsecured and unsubordinated debt from time to time outstanding. The interest rate and maturity date for each series of Final Settlement Notes is as follows: the Final Settlement 2026 Notes will bear interest at a rate of 3.400% per annum and will mature on September 15, 2026; the Final Settlement 2027 Notes will bear interest at a rate of 3.400% per annum and will mature on June 15, 2027; the Final Settlement 2030 Notes will bear interest at a rate of 1.350% per annum and will mature on September 15, 2030; the Final Settlement 2047 Notes will bear interest at a rate of 3.400% per annum and will mature on June 15, 2047; and the Final Settlement 2050 Notes will bear interest at a rate of 2.500% per annum and will mature on September 15, 2050.

The foregoing summaries of the Fifteenth Supplemental Indenture and the Final Settlement Notes do not purport to be complete and each is qualified in its entirety by reference to the applicable full text of the Base Indenture and the Fifteenth Supplemental Indenture, including the forms of the New Microsoft Notes attached thereto.

The Exchange Offers and Consent Solicitations were made only to holders of Existing Activision Blizzard Notes who completed and returned an eligibility letter confirming that they were persons (a) in the United States reasonably believed to be "qualified institutional buyers" as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), or (b) outside the United States who were not "U.S. persons" as defined in Rule 902 under the Securities Act and who were eligible to participate in the Exchange Offer pursuant to the laws of the applicable jurisdiction, as set forth in the eligibility letter ("Eligible Holders").

Eligible Holders of Existing Activision Blizzard Notes who were located in or a resident of Canada were also required to complete and return a Canadian supplemental eligibility letter to D.F. King & Co., Inc. (the "Information Agent" and the "Exchange Agent") establishing their eligibility to participate in the Exchange Offers and providing supplemental information required for Canadian securities regulatory reporting purposes. Each holder of Existing Activision Blizzard Notes was, by participating in any Exchange Offer, deemed to represent and warrant that it was not located in or a resident of any province or territory of Canada, and that it was not tendering any Existing Activision Blizzard Notes on behalf of a beneficial owner that was located in or a resident of Canada, unless either: (i) such holder completed and returned a Canadian supplemental eligibility letter to the Information Agent, or (ii) such holder was an account manager outside Canada acting on behalf of a Canadian beneficial owner on a fully-discretionary basis, and no acts in furtherance of the exchange of such beneficial owner's Existing Activision Blizzard Notes took place in Canada.

D.F. King & Co., Inc. is acting as the Exchange Agent and Information Agent in connection with the Exchange Offers and Consent Solicitations. Questions or requests for assistance related to the Exchange Offers may be directed to D.F. King & Co., Inc. by sending an email to [email protected] or by calling (866) 227-7300 (U.S. toll-free) or (212) 269-5550 (banks and brokers). You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offers.

This press release does not constitute an offer to sell or purchase, or a solicitation of an offer to sell or purchase, or the solicitation of tenders or consents with respect to, any security. This press release should not be construed as an offer to sell or purchase, or a solicitation of an offer to sell or purchase, or the solicitation of tenders or consents with respect to, any Microsoft securities or other securities by Activision Blizzard. No offer, solicitation, purchase or sale was made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful. The Exchange Offers and Consent Solicitations were made to Eligible Holders solely pursuant to the Offering Memorandum and Consent Solicitation Statement and only to such persons and in such jurisdictions as permitted under applicable law.

The New Microsoft Notes have not been registered with the Securities and Exchange Commission (the "SEC") under the Securities Act or any state or foreign securities laws. Therefore, the New Microsoft Notes may not be offered or sold in the United States or to any U.S. person absent registration, except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. In connection with the Exchange Offers, Microsoft expects to enter into a registration rights agreement, pursuant to which Microsoft will be obligated to use commercially reasonable efforts to file with the SEC and cause to become effective a registration statement with respect to an offer to exchange each series of New Microsoft Notes for new notes, on or prior to January 29, 2025. In addition, Microsoft has agreed to use commercially reasonable efforts to file a shelf registration statement to cover resales of the New Microsoft Notes under the Securities Act in certain circumstances.

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Cautionary Note Regarding Forward-looking Statements
This press release includes forward-looking statements within the meaning of federal securities laws. All statements, other than statements of historical fact, included in this press release are forward-looking statements. Such forward-looking statements include, but are not limited to, statements about the Final Settlement. No assurances can be given that the forward-looking statements contained in this press release will occur as expected and actual results may differ materially from those included in this press release. Forward-looking statements are based on current expectations and assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those included in this press release. Important risks, uncertainties and other factors are described in the Offering Memorandum and Consent Solicitation Statement, Microsoft's Annual Report on Form 10-K for the fiscal year ended June 30, 2023, Microsoft's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023, Activision Blizzard's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, Activision Blizzard's Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2023 and June 30, 2023, and Current Reports on Form 8-K and other filings Microsoft and Activision Blizzard make with the SEC. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Except to the extent required by applicable law, Microsoft does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

SOURCE Microsoft Corp.