Summary
Dell Technologies Inc. (DELL) filed an 8-K on March 14, 2019, to report a material definitive agreement, specifically the Fifth Amendment to its Senior Secured Credit Agreement. This amendment introduces a new senior secured term loan A-6 facility of $3,634 million, maturing in March 2024. A significant portion of this new facility, $2,839 million, consists of existing term A-2 loans that were rolled over, reducing the outstanding balance of the term A-2 loans to $1,277 million. The proceeds from this new term loan, alongside recently announced note offerings and incremental margin loan financing, are earmarked for the redemption of outstanding 2019 first lien notes, repayment of the term loan A-5 facility maturing in 2019, and other general corporate purposes. This financial maneuver aims to extend debt maturities and refinance existing obligations.
Key Highlights
- 1Dell Technologies Inc. entered into the Fifth Amendment to its Senior Secured Credit Agreement on March 13, 2019.
- 2A new senior secured term loan A-6 facility of $3,634 million was established, maturing on March 13, 2024.
- 3Approximately $2,839 million of existing term A-2 loans were rolled over into the new Term A-6 Loans.
- 4Following the amendment, $1,277 million in aggregate principal amount of Term A-2 Loans remained outstanding.
- 5The Term A-6 Loans will bear interest based on LIBOR or a base rate, plus an applicable margin determined by Dell's credit rating.
- 6Proceeds from the Term A-6 Loans, new note offerings, and margin loan financing will be used to redeem 2019 notes and repay the term loan A-5 facility.
- 7The refinancing strategy aims to extend the company's debt maturity profile and manage its capital structure.