Annual report pursuant to Section 13 and 15(d)

Debt and Revolving Credit Facility

v3.22.4
Debt and Revolving Credit Facility
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Debt Disclosure Debt and Revolving Credit Facility
Debt
The Company’s total debt as of December 31, 2022 and December 25, 2021 consisted of:
December 31,
2022		 December 25,
2021
(In millions)
7.50% Senior Notes Due August 2022 (7.50% Notes)
 $ —  $ 312 
2.950% Senior Notes Due 2024 (Xilinx 2024 Notes)
 750  — 
2.125% Convertible Senior Notes Due 2026 (2.125% Notes)
 1  1 
2.375% Senior Notes Due 2030 (Xilinx 2030 Notes)
 750  — 
3.924% Senior Notes Due 2032 (3.924% Notes)
 500  — 
4.393% Senior Notes Due 2052 (4.393% Notes)
 500  — 
Total debt (principal amount) 2,501  313 
Unamortized debt discount and issuance costs (34) — 
Total debt (net) 2,467  313 
Less: current portion of long-term debt —  (312)
Total long-term debt $ 2,467  $ 1 
In August 2022, the Company repaid its $312 million 7.50% Senior Notes.
Assumed Xilinx Notes
In connection with the acquisition of Xilinx, the Company assumed $1.5 billion in aggregate principal of Xilinx’s 2.95% Notes and 2.375% Notes (together, the Assumed Xilinx Notes) which were recorded at fair value as of the Xilinx Acquisition Date. The difference between the fair value at the Xilinx Acquisition Date and the principal outstanding of the Assumed Xilinx Notes is being amortized through interest expense over the remaining term of the debt. The Assumed Xilinx Notes are general unsecured senior obligations of the Company with semi-annual fixed interest payments due on June 1 and December 1. The indentures governing the Assumed Xilinx Notes contain various covenants which limit the Company’s ability to, among other things, create certain liens on principal property or the capital stock of certain subsidiaries, enter into certain sale and leaseback transactions with respect to principal property, and consolidate or merge with, or convey, transfer or lease all or substantially all of the Company’s assets to another person.
3.924% Senior Notes Due 2032 and 4.393% Senior Notes Due 2052
On June 9, 2022, the Company issued $1.0 billion in aggregate principal amount of 3.924% Notes and 4.393% Notes. The 3.924% Notes and 4.393% Notes are general unsecured senior obligations of the Company. The interest is payable semi-annually on June 1 and December 1 of each year, commencing on December 1, 2022. The 3.924% and 4.393% Notes are governed by the terms of an indenture dated June 9, 2022 between the Company and US Bank Trust Company, National Association as trustee. As of December 31, 2022, the outstanding aggregate principal amount of the 3.924% Notes and 4.393% Notes was $1.0 billion.
The Company may redeem some or all of the 3.924% Notes and 4.393% Notes prior to March 1, 2032 and December 1, 2051, respectively, at a price equal to the greater of the present value of the principal amount and future interest through the maturity of the 3.924% Notes or 4.393% Notes or 100% of the principal amount plus accrued and unpaid interest. Holders have the right to require the Company to repurchase all or a portion of the 3.924% Notes or 4.393% Notes in the event that the Company undergoes a change of control as defined in the indenture, at a repurchase price of 101% of the principal amount plus accrued and unpaid interest. Additionally, an event of default may result in the acceleration of the maturity of the 3.924% Notes and 4.393% Notes.
2.125% Notes
During 2022, activity on the 2.125% Notes was immaterial.
7.50% Senior Notes Due 2022
On August 15, 2012, the Company issued $500 million of its 7.50% Senior Notes due 2022 (7.50% Notes). These notes matured on August 15, 2022.
Future Payments on Total Debt
As of December 31, 2022, the Company’s future debt payment obligations were as follows:
Term Debt
(Principal only)
 Year (In millions)
2023 $ — 
2024 750 
2025 — 
2026 1 
2027 — 
2028 and thereafter 1,750 
Total $ 2,501 
Revolving Credit Facility
On April 29, 2022, the Company entered into a Credit Agreement (Revolving Credit Agreement) with Wells Fargo Bank, N.A. as administrative agent and the other banks identified therein as lenders. The Revolving Credit Agreement provides for a five-year revolving credit facility in an aggregate principal amount not to exceed $3.0 billion (subject to certain terms and conditions).
Revolving loans under the Revolving Credit Agreement can be Secure Overnight Financing Rate (SOFR) Loans or Base Rate Loans (each as defined in the Revolving Credit Agreement) at the Company's option. Each SOFR Loan will bear interest at a rate per annum equal to the applicable SOFR Rate plus a margin based on the Company's Debt Ratings (as defined in the Revolving Credit Agreement) from time to time of between 0.625% and 1.250%. Each Base Rate Loan will bear interest at a rate per annum equal to the Base Rate (as defined in the Revolving Credit Agreement) plus a margin based on the Company's Debt Ratings from time to time of between 0.000% and 0.250%. In addition, the Company has agreed to pay a commitment fee based on the Company's Debt Ratings from time to time of between 0.050% and 0.125% (as defined in the Revolving Credit Agreement). The Revolving Credit Agreement also contains a sustainability-linked pricing component which provides for interest rate and facility fee reductions or increases based on the Company meeting or missing targets related to environmental sustainability, specifically greenhouse gas emissions.
The Revolving Credit Agreement contains customary representations and warranties, and affirmative and negative covenants and events of default applicable to the Company and its subsidiaries. As of December 31, 2022, the Company was in compliance with these covenants.
As of December 31, 2022, the Company had no outstanding borrowings under this revolving credit facility but may borrow in the future and use the proceeds for payment of expenses in connection with working capital and general corporate expenses.
Commercial PaperOn November 3, 2022, the Company established a new commercial paper program, under which the Company may issue unsecured commercial paper notes up to a maximum principal amount outstanding at any time of $3 billion with a maturity of up to 397 days from the date of issue. The commercial paper will be sold at a discount from par or, alternatively, will be sold at par and bear interest at rates that will vary based on market conditions at the time of issuance. As of December 31, 2022, the Company had no commercial paper outstanding.