Summary
This 8-K filing by Denali Holding Inc. (the entity that would become Dell Technologies Inc.) on June 22, 2016, details the successful closing of a significant debt offering totaling $3.25 billion in Senior Notes. These notes, comprising $1.625 billion of 5.875% Senior Notes due 2021 and $1.625 billion of 7.125% Senior Notes due 2024, were issued by two wholly-owned subsidiaries, Diamond 1 Finance Corporation and Diamond 2 Finance Corporation. The primary purpose of this financing was to fund the pending acquisition of EMC Corporation, a monumental transaction for Dell. The proceeds were initially placed in escrow and are earmarked for the consummation of the Dell-EMC Merger, along with other planned debt and equity financings. The filing also outlines the post-merger structure where the subsidiaries will merge into existing Dell entities and EMC, with these surviving entities assuming the obligations under the Senior Notes, and new guarantees from the parent company and other subsidiaries being put in place.
Key Highlights
- 1Dell Technologies (under Denali Holding Inc.) successfully closed a $3.25 billion offering of Senior Notes to fund the acquisition of EMC.
- 2The offering includes $1.625 billion in 5.875% Senior Notes due 2021 and $1.625 billion in 7.125% Senior Notes due 2024.
- 3Proceeds from the notes were held in escrow and are designated for the Dell-EMC Merger, alongside other financing sources.
- 4The structure involves subsidiary mergers post-acquisition, with surviving entities assuming the notes, and new parent/subsidiary guarantees being established.
- 5The Senior Notes are unsecured and subordinate to future secured debt, including that associated with the Dell-EMC Merger financing.
- 6A special mandatory redemption at 100% of the issue price will occur if the Dell-EMC Merger is not completed by December 16, 2016.
- 7A change of control triggering event would allow noteholders to require repurchase at 101% of the principal amount.