Oracle is raising $20 billion at once, half in new stock and half in bonds, according to offering documents it filed with the SEC Monday morning. The money will go to general corporate purposes, which the company says may include capital expenditures, paying down debt, acquisitions, dividends or buybacks. In the same filings, Oracle repeats its expectation that customer demand will require continued growth in capital spending to add data center capacity.
The two sales are independent. Either can close without the other.
How much new stock
Oracle plans to sell $10 billion of common stock. At the Oct. 30 closing price of $130.67, that would be about 76.5 million new shares, the filing says, though the final count depends on the price the shares actually sell for. Oracle had about 3.02 billion shares outstanding at the end of August, so the sale would add roughly 2.5% to the share count.
Wells Fargo Securities, Citigroup, BNP Paribas, Deutsche Bank Securities, J.P. Morgan and PNC Capital Markets are among the joint book-running managers.
The bond side
The other $10 billion comes from six series of senior notes: a floating-rate note and a fixed-rate note due in 2029, plus fixed-rate notes due in 2031, 2033, 2037 and 2046. The preliminary filing leaves the interest rates and the size of each series blank until the bonds are priced.
The new bonds add to a large existing debt load. As of Aug. 31, Oracle had about $236.1 billion in total liabilities, including $125.3 billion of senior unsecured borrowings that will rank equally with the new notes. Oracle's subsidiaries carried about $107.2 billion of liabilities of their own, and the new notes sit behind those claims on the subsidiaries' assets.
