NOTES PAYABLE AND OTHER BORROWINGS

12 Months Ended

May 31, 2022

Debt Disclosure [Abstract]

NOTES PAYABLE AND OTHER BORROWINGS

7. NOTES PAYABLE AND OTHER BORROWINGS

Notes payable and other borrowings consisted of the following:

		May 31,
		2022				2021
(Amounts in millions)	Date of Issuance	Amount			Effective Interest Rate	Amount			Effective Interest Rate
Fixed-rate senior notes:
$1,500, 2.80%, due July 2021(1)	July 2014	$	—		N.A	$	1,500		2.82%
$4,250, 1.90%, due September 2021	July 2016		—		N.A		4,250		1.94%
$2,500, 2.50%, due May 2022	May 2015		—		N.A		2,500		2.56%
$2,500, 2.50%, due October 2022	October 2012		2,500		2.51%		2,500		2.51%
$1,250, 2.625%, due February 2023	November 2017		1,250		2.64%		1,250		2.64%
$1,000, 3.625%, due July 2023	July 2013		1,000		3.73%		1,000		3.73%
$2,500, 2.40%, due September 2023	July 2016		2,500		2.40%		2,500		2.40%
$2,000, 3.40%, due July 2024	July 2014		2,000		3.43%		2,000		3.43%
$2,000, 2.95%, due November 2024	November 2017		2,000		2.98%		2,000		2.98%
$3,500, 2.50%, due April 2025	April 2020		3,500		2.51%		3,500		2.51%
$2,500, 2.95%, due May 2025	May 2015		2,500		3.00%		2,500		3.00%
€750, 3.125%, due July 2025(2)(3)	July 2013		803		3.17%		916		3.17%
$2,750, 1.65%, due March 2026	March 2021		2,750		1.66%		2,750		1.66%
$3,000, 2.65%, due July 2026	July 2016		3,000		2.69%		3,000		2.69%
$2,250, 2.80%, due April 2027	April 2020		2,250		2.83%		2,250		2.83%
$2,750, 3.25%, due November 2027	November 2017		2,750		3.26%		2,750		3.26%
$2,000, 2.30%, due March 2028	March 2021		2,000		2.34%		2,000		2.34%
$3,250, 2.95%, due April 2030	April 2020		3,250		2.96%		3,250		2.96%
$500, 3.25%, due May 2030	May 2015		500		3.30%		500		3.30%
$3,250, 2.875%, due March 2031	March 2021		3,250		2.89%		3,250		2.89%
$1,750, 4.30%, due July 2034	July 2014		1,750		4.30%		1,750		4.30%
$1,250, 3.90%, due May 2035	May 2015		1,250		3.95%		1,250		3.95%
$1,250, 3.85%, due July 2036	July 2016		1,250		3.85%		1,250		3.85%
$1,750, 3.80%, due November 2037	November 2017		1,750		3.83%		1,750		3.83%
$1,250, 6.50%, due April 2038	April 2008		1,250		6.52%		1,250		6.52%
$1,250, 6.125%, due July 2039	July 2009		1,250		6.19%		1,250		6.19%
$3,000, 3.60%, due April 2040	April 2020		3,000		3.62%		3,000		3.62%
$2,250, 5.375%, due July 2040	July 2010		2,250		5.45%		2,250		5.45%
$2,250, 3.65%, due March 2041	March 2021		2,250		3.70%		2,250		3.70%
$1,000, 4.50%, due July 2044	July 2014		1,000		4.50%		1,000		4.50%
$2,000, 4.125%, due May 2045	May 2015		2,000		4.15%		2,000		4.15%
$3,000, 4.00%, due July 2046	July 2016		3,000		4.00%		3,000		4.00%
$2,250, 4.00%, due November 2047	November 2017		2,250		4.03%		2,250		4.03%
$4,500, 3.60%, due April 2050	April 2020		4,500		3.62%		4,500		3.62%
$3,250, 3.95%, due March 2051	March 2021		3,250		3.96%		3,250		3.96%
$1,250, 4.375%, due May 2055	May 2015		1,250		4.40%		1,250		4.40%
$3,500, 3.85%, due April 2060	April 2020		3,500		3.87%		3,500		3.87%
$1,500, 4.10%, due March 2061	March 2021		1,500		4.11%		1,500		4.11%
Other borrowings due August 2025	November 2016		113		3.53%		113		3.53%
Total senior notes and other borrowings		$	76,166			$	84,529
Unamortized discount/issuance costs			(284	)			(315	)
Hedge accounting fair value adjustments(1)(3)			(23	)			31
Total notes payable and other borrowings		$	75,859			$	84,245
Notes payable, current		$	3,749			$	8,250
Notes payable and other borrowings, non-current		$	72,110			$	75,995

⁽¹⁾ We entered into certain interest rate swap agreements that had the economic effects of modifying the fixed-interest obligations associated with the 2.80% senior notes that were outstanding as of May 31, 2021 and that were due and were settled in July 2021 (July 2021 Notes) so that the interest payable on these notes effectively became variable based on LIBOR. The effective interest rates after consideration of these fixed to variable interest rate swap agreements was 0.87% for the July 2021 Notes as of May 31, 2021. Refer to Note 1 for a description of our accounting for fair value hedges.

⁽²⁾ In July 2013, we issued €750 million of 3.125% senior notes due July 2025 (July 2025 Notes). Principal and unamortized discount/issuance costs for the July 2025 Notes in the table above were calculated using foreign currency exchange rates, as applicable, as of May 31, 2022 and May 31, 2021, respectively. The July 2025 Notes are registered and trade on the New York Stock Exchange.

⁽³⁾ In fiscal 2018 we entered into certain cross-currency interest rate swap agreements that have the economic effect of converting our fixed-rate, Euro-denominated debt, including annual interest payments and the payment of principal at maturity, to a variable-rate, U.S. Dollar-denominated debt of $871 million based on LIBOR. The effective interest rates as of May 31, 2022 and 2021 after consideration of the cross-currency interest rate swap agreements were 4.10% and 3.15%, respectively, for the July 2025 Notes. Refer to Note 1 for a description of our accounting for fair value hedges.

Future principal payments (adjusted for the effects of the cross-currency interest rate swap agreements associated with the July 2025 Notes) for all of our borrowings at May 31, 2022 were as follows (in millions):

Fiscal 2023	$	3,750
Fiscal 2024		3,500
Fiscal 2025		10,000
Fiscal 2026		3,734
Fiscal 2027		5,250
Thereafter		50,000
Total	$	76,234

Senior Notes

Interest is payable semi-annually for the senior notes listed in the above table except for the Euro Notes for which interest is payable 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 notes we may issue in the future pursuant to our commercial paper program (see additional discussion regarding our commercial paper program below) and all existing and future unsecured senior indebtedness of Oracle Corporation including the Revolving Credit Agreement and Bridge Credit Agreement, each as described further below. All existing and future liabilities of the subsidiaries of Oracle Corporation are or will be effectively senior to the senior notes, any future borrowings pursuant to the Revolving Credit Agreement and borrowings made on June 8, 2022 under the Bridge Credit Agreement, and any future issuances of commercial paper notes. We were in compliance with all debt-related covenants at May 31, 2022.

Credit Agreements

In March 2022, we entered into the following two credit agreements:

• a $6.0 billion, five-year revolving credit agreement (the Revolving Credit Agreement), which provides for an unsecured $6.0 billion, five-year revolving credit facility (the Revolving Facility) to be used for our working capital purposes and for other general corporate purposes. Subject to certain conditions stated in the Revolving Credit Agreement, we may borrow, prepay and reborrow amounts under the Revolving Facility during the term of the Revolving Credit Agreement. All amounts borrowed under the Revolving Credit Agreement will become due on March 8, 2027, unless the commitments are terminated earlier either at our request or, if an event of default occurs, by the lenders (or automatically in the case of certain bankruptcy-related events). Interest is based on either (a) a Term Secured Overnight Financing Rate (SOFR)-based formula plus a margin of 87.5 basis points to 150.0 basis points, depending on the credit rating assigned to our long-term senior unsecured debt, or (b) a Base Rate formula plus a margin of 0.0 basis point to 50.0 basis points, depending on the same such credit rating, each as set forth in the Revolving Credit Agreement; and

• a $15.7 billion delayed draw term loan credit agreement (the Bridge Credit Agreement), which provides for an unsecured $15.7 billion, 364-day term loan commitment (the Bridge Facility), subject to the satisfaction of certain customary conditions. The Bridge Credit Agreement provides that, subject to certain exceptions, net cash proceeds received by us from certain debt and equity issuances shall result in mandatory prepayments or commitment reductions under the Bridge Credit Agreement. The proceeds of borrowings under the Bridge Facility were used to finance the acquisition of Cerner, our refinancing of indebtedness in connection with such acquisition and to pay related fees and expenses. All amounts borrowed under the Bridge Credit Agreement will become due on March 7, 2023, unless settled earlier pursuant to the terms of the Bridge Credit Agreement. Interest is based on either (a) a Term SOFR-based formula plus a margin of 100.0 basis points to 137.5 basis points, depending on the credit rating assigned to our long-term senior unsecured debt, or (b) a Base Rate formula plus a margin of 0.0 basis point to 37.5 basis points, depending on the same such credit rating, each as set forth in the Bridge Credit Agreement.

No amounts were outstanding pursuant to either of the credit agreements as of May 31, 2022. On June 8, 2022, we drew down the full amount of the Bridge Credit Agreement to finance the acquisition of Cerner.

Each of the abovementioned credit agreements contains certain customary representations and warranties, covenants and events of default, including the requirement that the ratio of “Consolidated EBITDA” to “Consolidated Net Interest Expense” (each term as defined in the respective credit agreements) of Oracle and its subsidiaries shall not be less than 3.0 to 1.0 at the end of any fiscal quarter during the period that the credit agreement is effective. If an event of default occurs under one of the credit agreements and is not cured within applicable grace periods or waived, any unpaid amounts under the applicable credit agreement may be declared immediately due and payable and the commitments under that agreement may be terminated. We were in compliance with the two credit agreements’ covenants as of May 31, 2022.

Commercial Paper Program and Commercial Paper Notes

Our existing $3.0 billion commercial paper program allows us to issue and sell unsecured short-term promissory notes pursuant to a private placement exemption from the registration requirements under federal and state securities laws pursuant to dealer agreements with various banks and an Issuing and Paying Agency Agreement with Deutsche Bank Trust Company Americas. As of May 31, 2022 and 2021, we did not have any outstanding commercial paper notes.