8-KMaterial AgreementsFinancial EventsExhibits & Filings

Dell Technologies Inc. 8-K Report, Material Agreement (Oct 24, 2017)

Filed October 24, 2017For Securities:DELL

Summary

This 8-K filing from Dell Technologies Inc. details significant amendments to its Senior Secured Credit Agreement, primarily focused on refinancing existing debt. The company entered into a Second Refinancing Amendment and a Third Refinancing Amendment on October 20, 2017. These amendments involve restructuring term loans and increasing revolving credit commitments. Notably, the company has refinanced portions of its Term A-2 and Term A-3 loans with new facilities maturing in September 2021 and December 2018, respectively. Additionally, a new Term B loan facility has been established, maturing in September 2023, replacing the previous one. The refinancing efforts resulted in lower interest rate margins across several debt facilities, indicating improved borrowing costs for Dell Technologies. The total amount of debt outstanding under the Senior Secured Credit Agreement remains substantially unchanged after these amendments. The company also increased its revolving credit commitments by $180 million, providing additional liquidity. These actions suggest a strategic move to optimize the company's debt structure and potentially reduce interest expenses.

Key Highlights

  • 1Dell Technologies Inc. executed a Second Refinancing Amendment to its Senior Secured Credit Agreement on October 20, 2017.
  • 2A Third Refinancing Amendment to the Senior Secured Credit Agreement was also executed on October 20, 2017.
  • 3The Second Refinancing Amendment introduced new Term A-2 and Term A-3 loan facilities with different maturity dates and updated interest rate margins, reflecting a decrease from prior terms.
  • 4The Third Refinancing Amendment established a new Term B loan facility maturing in September 2023, with reduced interest margins compared to the refinanced loans.
  • 5Revolving credit commitments were increased by $180 million to $3,330,000,000, offering enhanced liquidity.
  • 6Proceeds from the increase in New Term A-2 Loans were used to pay down existing debt (Original Term A-3 and First Refinancing Term B Loans) and cover fees, with remaining funds for general corporate purposes.
  • 7Following these amendments, the total outstanding debt under the Senior Secured Credit Agreement is substantially unchanged.

Frequently Asked Questions

The main purpose of the amendments is to refinance existing debt facilities, optimize the company's debt structure, and potentially lower borrowing costs by securing new loans with reduced interest rate margins. These actions aim to manage the company's liabilities more effectively.

No, according to the filing, after giving effect to the Second and Third Refinancing Amendments, the total amount of debt outstanding under the Senior Secured Credit Agreement is substantially unchanged. While some loan principal amounts were increased (New Term A-2 Loans), others were reduced or paid down with proceeds from the increased loans.

The refinancing includes an increase in revolving credit commitments by $180 million, bringing the total to $3,330,000,000. This enhancement to the revolving credit facility provides Dell Technologies with increased financial flexibility and liquidity.

The filing indicates that the interest rate margins on the refinanced loans (New Term A-2, New Term A-3, and New Term B) reflect a decrease compared to the applicable margins on the original or previously refinanced loans. This suggests a reduction in borrowing costs.