8-KOther EventsExhibits & Filings

Dell Technologies Inc. 8-K Report, Corporate Update (Mar 7, 2019)

Filed March 7, 2019For Securities:DELL

Summary

Dell Technologies Inc. announced a significant debt refinancing initiative through a private offering of $4 billion in First Lien Notes, later upsized to $4.5 billion. This offering, comprised of notes due in 2024, 2026, and 2029 with varying interest rates, is primarily aimed at redeeming Dell's outstanding $3.75 billion in 3.480% first lien notes due in 2019. The net proceeds, along with concurrent refinancing of other credit facilities, are intended to manage and extend the maturity profile of the company's debt without materially impacting the total outstanding debt amount. These transactions are expected to close by March 20, 2019, with the redemption of the 2019 notes scheduled for March 21, 2019. This move signifies Dell's proactive approach to managing its capital structure. The refinancing aims to improve the company's debt maturity profile, reduce short-term refinancing risk, and maintain financial flexibility. While the overall debt principal is expected to remain similar, the company is strategically extending maturities and potentially optimizing its borrowing costs. Investors should note that the offering was conducted privately to qualified institutional buyers and is subject to customary closing conditions, indicating a focused approach to capital markets engagement.

Key Highlights

  • 1Dell Technologies announced a $4.5 billion private offering of First Lien Notes across multiple maturities (2024, 2026, 2029).
  • 2The primary use of proceeds is to redeem all outstanding $3.75 billion of 3.480% first lien notes due in 2019.
  • 3The offering was upsized by $500 million from the initially announced $4 billion.
  • 4These transactions are part of a broader refinancing effort, including term loan and margin loan facilities, aiming to manage debt maturity.
  • 5Dell expects no material impact on the aggregate principal amount of indebtedness outstanding after these transactions.
  • 6The offering was made privately to qualified institutional buyers (QIBs) and under Regulation S.
  • 7The redemption of the 2019 first lien notes is conditioned upon receiving sufficient proceeds from the new note offering.

Frequently Asked Questions

The main purpose is to refinance existing debt, specifically to redeem Dell's outstanding $3.75 billion in 3.480% first lien notes due in 2019, and to manage other debt maturities. This is part of a broader strategy to optimize the company's capital structure and extend its debt maturity profile.

Dell is issuing $4.5 billion in aggregate principal amount of First Lien Notes. This includes $1 billion of 4.000% notes due 2024, $1.75 billion of 4.900% notes due 2026, and $1.75 billion of 5.300% notes due 2029. The offering was upsized from an initial $4 billion.

Dell expects that these transactions, including the new note offering and concurrent refinancings, will have no material impact on the aggregate principal amount of indebtedness outstanding. The proceeds are being used to replace existing debt, not to significantly increase the total borrowing.

The offering was conducted as a private placement. In the U.S., it was offered to persons reasonably believed to be 'qualified institutional buyers' (QIBs). Outside the U.S., it was offered pursuant to Regulation S.