NOTES PAYABLE AND OTHER BORROWINGS

6 Months Ended

Nov. 30, 2016

6.	NOTES PAYABLE AND OTHER BORROWINGS

Senior Notes

In July 2016, we issued $14.0 billion, par value, of fixed-rate senior notes comprised of the following as of November 30, 2016:

		November 30, 2016
(Dollars in millions)	Date of Issuance	Amount			Effective Interest Rate
$4,250, 1.90%, due September 2021	July 2016	$	4,250		1.94%
$2,500, 2.40%, due September 2023	July 2016		2,500		2.40%
$3,000, 2.65%, due July 2026	July 2016		3,000		2.69%
$1,250, 3.85%, due July 2036	July 2016		1,250		3.85%
$3,000, 4.00%, due July 2046	July 2016		3,000		4.00%
Total fixed rate senior notes		$	14,000
Unamortized discount/issuance costs			(65	)
Total fixed rate senior notes, net		$	13,935

We issued the senior notes for general corporate purposes, which may include stock repurchases, payment of cash dividends on our common stock and repayment of indebtedness and future acquisitions. The interest is payable semi-annually. We may redeem some or all of the senior notes of each series prior to their maturity, subject to certain restrictions, and the payment of an applicable make-whole premium in certain instances.

The senior notes rank pari passu with any other existing and future unsecured and unsubordinated indebtedness of Oracle Corporation. All existing and future indebtedness and liabilities of the subsidiaries of Oracle Corporation are or will be effectively senior to the senior notes. We were in compliance with all debt-related covenants at November 30, 2016.

Other Fiscal 2017 Borrowings Activities

In the second quarter of fiscal 2017, we assumed $113 million of debt that bears interest at 3.53% and matures in August 2025 in connection with our acquisition of certain land and buildings.

In connection with our acquisition of NetSuite in the second quarter of fiscal 2017 (see Note 2 above), we assumed $310 million par value of legacy NetSuite convertible notes (NetSuite Debt) with a fair value of $342 million as of the acquisition date. The NetSuite Debt bears interest at 0.25% and matures in June 2018. Our acquisition of NetSuite triggered (a) the right of holders of the NetSuite Debt to convert their debt holdings into an amount payable in cash, at any time through December 22, 2016, based upon conversion formulas that are contained within the NetSuite Debt indenture and (b) the obligation of NetSuite to offer to repurchase the NetSuite Debt from each holder at a purchase price equal to par, plus accrued and unpaid interest, which offer will expire on December 21, 2016. As of November 30, 2016, $342 million of the NetSuite Debt remained outstanding.

In May 2016, we borrowed $3.8 billion pursuant to three revolving credit agreements with JPMorgan Chase Bank, N.A., as initial lender and administrative agent (the 2016 Credit Agreements). In June 2016, we repaid the $3.8 billion and the 2016 Credit Agreements expired pursuant to their terms.

There have been no other significant changes in our notes payable or other borrowing arrangements that were disclosed in our Annual Report on Form 10-K for the fiscal year ended May 31, 2016.