v3.23.3
Debt
 12 Months Ended
Aug. 31, 2023
Debt Disclosure [Abstract]  
Debt
Debt
As of August 31, 2023As of September 1, 2022
Net Carrying AmountNet Carrying Amount
Stated RateEffective RatePrincipalCurrentLong-TermTotalPrincipalCurrentLong-TermTotal
2024 Term Loan A6.146 %6.18 %$588 $— $587 $587 $1,188 $— $1,187 $1,187 
2025 Term Loan A6.681 %6.82 %1,052 — 1,050 1,050 — — — — 
2026 Term Loan A6.806 %6.94 %971 49 921 970 — — — — 
2027 Term Loan A6.931 %7.07 %1,123 57 1,063 1,120 — — — — 
2026 Notes
4.975 %5.07 %500 — 499 499 500 — 498 498 
2027 Notes(1)
4.185 %4.27 %900 — 798 798 900 — 806 806 
2028 Notes5.375 %5.52 %600 — 596 596 — — — — 
2029 A Notes5.327 %5.40 %700 — 697 697 700 — 697 697 
2029 B Notes6.750 %6.54 %1,250 — 1,263 1,263 — — — — 
2030 Notes
4.663 %4.73 %850 — 846 846 850 — 846 846 
2032 Green Bonds2.703 %2.77 %1,000 — 995 995 1,000 — 994 994 
2033 A Notes5.875 %5.96 %750 — 745 745 — — — — 
2033 B Notes5.875 %6.01 %900 — 890 890 — — — — 
2041 Notes3.366 %3.41 %500 — 497 497 500 — 496 496 
2051 Notes3.477 %3.52 %500 — 496 496 500 — 496 496 
Finance lease obligations
N/A3.86 %1,281 172 1,109 1,281 886 103 783 886 
 
$13,465 $278 $13,052 $13,330 $7,024 $103 $6,803 $6,906 
(1) In 2021, we entered into fixed-to-floating interest rate swaps on the 2027 Notes with an aggregate $900 million notional amount equal to the principal amount of the 2027 Notes. The resulting variable interest paid is at a rate equal to SOFR plus approximately 3.33%. The fixed-to-floating interest rate swaps are accounted for as fair value hedges, and as a result, the carrying values of our 2027 Notes reflect adjustments in fair value.
As of August 31, 2023, all of our debt, other than finance lease obligations, were unsecured obligations that rank equally in right of payment with all of our other existing and future unsecured indebtedness and were effectively subordinated to all future secured indebtedness, to the extent of the value of the assets securing such indebtedness. All our unsecured debt were obligations of our parent company, Micron, and were structurally subordinated to all liabilities of its subsidiaries, including trade payables. The terms of our indebtedness generally contain cross payment default and cross acceleration provisions. Micron’s guarantees of certain liabilities of its subsidiaries are unsecured obligations ranking equally in right of payment with all of Micron’s other existing and future unsecured indebtedness.

Debt Activity

The table below presents the effects of debt financing and prepayment activities in 2023:
Transaction DateIncrease (Decrease) in PrincipalIncrease (Decrease) in Carrying ValueIncrease (Decrease) in Cash
Issuances
2029 B NotesOctober 31, 2022$750 $744 $744 
2025 Term Loan ANovember 3, 2022927 925 925 
2026 Term Loan ANovember 3, 2022746 745 745 
2027 Term Loan ANovember 3, 2022927 924 924 
2025 Term Loan AJanuary 5, 2023125 125 125 
2026 Term Loan AJanuary 5, 2023250 249 249 
2027 Term Loan AJanuary 5, 2023225 225 225 
2029 B NotesFebruary 9, 2023500 520 520 
2033 A NotesFebruary 9, 2023750 745 745 
2028 NotesApril 11, 2023600 596 596 
2033 B NotesApril 11, 2023900 890 890 
Prepayments
2024 Term Loan AApril 13, 2023(600)(600)(600)
$6,100 $6,088 $6,088 

In 2022, we issued $2.00 billion of senior unsecured notes and received cash of $1.99 billion. The approximate $1.00 billion of net proceeds from the issuance of the 2032 Green Bonds are being used to fund eligible sustainability-focused projects. The remaining proceeds, along with cash on hand, were used to repay $1.85 billion of principal amount of notes (carrying value of $1.85 billion) for $1.93 billion in cash. We recognized losses of $83 million in connection with these repayments.

In 2021, substantially all holders of our 2032D Notes converted their notes. We settled these conversions and all remaining 2032D Notes with $185 million in cash and 11.1 million shares of our stock, which approximated the carrying value of debt and equity for those notes.

Senior Unsecured Notes

We may redeem our 2026 Notes, 2027 Notes, 2028 Notes, 2029 A Notes, 2029 B Notes, 2030 Notes, 2032 Green Bonds, 2033 A Notes, 2033 B Notes, 2041 Notes, and 2051 Notes (the “Senior Unsecured Notes”), in whole or in part, at our option prior to their respective maturity dates at a redemption price equal to the greater of (i) 100% of the principal amount of the notes to be redeemed and (ii) the present value of the remaining scheduled payments of principal and interest, in each case plus accrued interest. We may also redeem any series of our Senior Unsecured Notes, in whole or in part, at a price equal to par between one and six months prior to maturity in accordance with the respective terms of such series.
Each series of Senior Unsecured Notes contains covenants that, among other things, limit, in certain circumstances, our ability and/or the ability of our restricted subsidiaries (which are generally domestic subsidiaries in which we own at least 80% of the voting stock and which own principal property, as defined in the indenture governing such series) to (1) create or incur certain liens; (2) enter into certain sale and lease-back transactions; and (3) consolidate with or merge with or into, or convey, transfer, or lease all or substantially all of our properties and assets, to another entity. These covenants are subject to a number of limitations and exceptions. Additionally, if a change of control triggering event, as defined in the indentures governing our Senior Unsecured Notes, occurs with respect to a series of Senior Unsecured Notes, we will be required to offer to purchase such Senior Unsecured Notes at 101% of the outstanding aggregate principal amount plus accrued interest up to the purchase date.

2032 Green Bonds: We plan to allocate an amount equal to the approximate $1.00 billion of net proceeds of our unsecured 2032 Green Bonds by November 1, 2023, to fund eligible sustainability-focused projects involving renewable energy, green buildings, energy efficiency, water management, waste abatement, and a circular economy.

Multi-Tranche Term Loan A

In 2023, we entered into a term loan agreement consisting of three tranches (the “Multi-Tranche Term Loan Agreement”) and borrowed $3.20 billion in aggregate principal amount. The tranches mature on November 3, 2025 (“2025 Term Loan A”); November 3, 2026 (“2026 Term Loan A”); and November 3, 2027 (“2027 Term Loan A”).

The 2026 Term Loan A and 2027 Term Loan A each require equal quarterly installment payments in an amount equal to 1.25% of the original principal amount. The 2025 Term Loan A does not require quarterly installment payments. Borrowings under the Multi-Tranche Term Loan Agreement will generally bear interest at adjusted term SOFR plus an applicable interest rate margin ranging from 1.00% to 2.00%, varying by tranche and depending on our corporate credit ratings. Adjusted term SOFR for the Multi-Tranche Term Loan Agreement is the SOFR benchmark plus 0.10%.

The Multi-Tranche Term Loan Agreement requires us to maintain, on a consolidated basis, a leverage ratio of total indebtedness to adjusted EBITDA, as defined in the Multi-Tranche Term Loan Agreement and calculated as of the last day of each fiscal quarter, not to exceed 3.25 to 1.00. On March 27, 2023, we amended the Multi-Tranche Term Loan Agreement to provide that in lieu of the foregoing leverage ratio, during the fourth quarter of 2023 and each quarter of 2024, we will be required to maintain, on a consolidated basis, a net leverage ratio of total net indebtedness to adjusted EBITDA, as defined in the Multi-Tranche Term Loan Agreement and calculated as of the last day of each fiscal quarter, not to exceed 3.25 to 1.00. Alternatively, for up to three of such five quarters, we may elect to comply with a requirement of minimum liquidity, as defined in the Multi-Tranche Term Loan Agreement, of not less than $5.0 billion. In the fourth quarter of 2023, we complied with the net leverage ratio. Each of the leverage ratio and net leverage ratio maximums, as applicable, is subject to a temporary four quarter increase in such ratio to 3.75 to 1.00 following certain material acquisitions.

The Multi-Tranche Term Loan Agreement contains other covenants that, among other things, limit, in certain circumstances, our ability and/or the ability of our restricted subsidiaries to (1) create or incur certain liens and enter into sale and lease-back transactions, (2) create, assume, incur, or guarantee certain additional secured indebtedness and unsecured indebtedness of our restricted subsidiaries, and (3) consolidate with or merge with or into, or convey, transfer, lease, or otherwise dispose of all or substantially all of our assets, to another entity. These covenants are subject to a number of limitations, exceptions, and qualifications. Our obligations under the Multi-Tranche Term Loan Agreement are unsecured.

2024 Term Loan A

On April 13, 2023, we used a portion of the proceeds from our April 2023 issuance of senior unsecured notes to prepay $600 million principal amount of our 2024 Term Loan A.
On June 7, 2023, the 2024 Term Loan A agreement was amended, pursuant to its transition provisions, to replace LIBOR-based benchmark rates with SOFR-based benchmark rates effective July 1, 2023. Subsequent to this amendment, borrowings under the 2024 Term Loan Agreement generally bear interest at adjusted term SOFR plus an applicable interest rate margin ranging from 0.625% to 1.375% depending on our corporate credit ratings. Adjusted term SOFR for the 2024 Term Loan A is the SOFR benchmark plus a credit spread adjustment ranging from approximately 0.11% to 0.43% depending on the applicable interest period selected. Prior to July 1, 2023, the 2024 Term Loan A bore interest at a rate equal to LIBOR plus 0.625% to 1.375% based on our corporate credit ratings.

The 2024 Term Loan A agreement contains the same leverage ratio, as amended, and substantially the same other covenants as the Multi-Tranche Term Loan Agreement. Our obligations under the 2024 Term Loan A agreement are unsecured.

Revolving Credit Facility

As of August 31, 2023, no amounts were outstanding under the Revolving Credit Facility and $2.50 billion was available to us. Under the Revolving Credit Facility, borrowings would generally bear interest at a rate equal to adjusted term SOFR plus 1.00% to 1.75%, depending on our corporate credit ratings. Adjusted term SOFR for the Revolving Credit Facility agreement is the SOFR benchmark plus a credit spread adjustment ranging from approximately 0.11% to 0.43% depending on the applicable interest period selected. Any amounts outstanding under the Revolving Credit Facility would mature in May 2026 and amounts borrowed may be prepaid without penalty.

The Revolving Credit Facility contains the same leverage ratio, as amended, and substantially the same other covenants as the Multi-Tranche Term Loan Agreement.

Maturities of Notes Payable

As of August 31, 2023, maturities of notes payable by fiscal year were as follows:
2024$107 
2025695 
20261,659 
20271,780 
20281,493 
2029 and thereafter6,450 
Unamortized issuance costs, discounts, and premium, net(35)
Hedge accounting fair value adjustment(100)
$12,049