8-KMaterial AgreementsFinancial EventsExhibits & Filings

Dell Technologies Inc. 8-K Report, Material Agreement (Mar 21, 2019)

Filed March 21, 2019For Securities:DELL

Summary

Dell Technologies Inc. (DELL) filed an 8-K on March 21, 2019, primarily detailing the successful closing of a significant debt offering. The company issued new First Lien Notes totaling $5.25 billion across three tranches: $1 billion in 4.000% notes due 2024, $1.75 billion in 4.900% notes due 2026, and $1.75 billion in 5.300% notes due 2029. These notes are senior secured obligations, ranking equally with existing senior indebtedness and senior to subordinated debt, and are secured by substantially all tangible and intangible assets of the issuers and guarantors. The proceeds from this offering were used, in part, to redeem outstanding 3.480% First Lien Notes due 2019. In addition to the new debt issuance, Dell Technologies also executed supplemental indentures for its existing Senior Notes and Secured Notes. This action involved adding new guarantors to ensure these existing debt obligations remain structurally sound and aligned with the company's capital structure. This strategic move allows Dell to refinance maturing debt and potentially optimize its debt profile, while maintaining its secured debt position and providing clarity on its leverage and liquidity strategy for investors.

Key Highlights

  • 1Dell Technologies successfully closed an offering of $5.25 billion in new First Lien Notes across three maturity dates: 2024, 2026, and 2029.
  • 2The new notes carry interest rates of 4.000%, 4.900%, and 5.300% respectively, reflecting a mix of medium-term debt financing.
  • 3The offering was conducted as a private transaction to qualified institutional buyers and outside the United States pursuant to Regulation S.
  • 4The new notes are senior secured obligations and are effectively senior to unsecured and future second lien debt due to collateral backing.
  • 5Proceeds from the new note issuance were used to redeem $3.75 billion of the company's 3.480% First Lien Notes due 2019.
  • 6Supplemental indentures were executed for existing Senior Notes and Secured Notes, incorporating new subsidiaries as guarantors.
  • 7A Registration Rights Agreement was entered into to facilitate an exchange offer for the newly issued notes, allowing for their future public trading.

Frequently Asked Questions

The primary purpose of this 8-K filing was to announce the closing of a significant debt offering by Dell Technologies, totaling $5.25 billion in new First Lien Notes, and to detail the use of proceeds, which included the redemption of existing debt. It also covered updates to guarantees for existing debt instruments.

Dell issued $5.25 billion in new First Lien Notes: $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. These notes are senior secured obligations.

The company used proceeds from the new debt issuance to redeem all $3.75 billion of its outstanding 3.480% First Lien Notes due 2019. This redemption occurred on March 21, 2019.

Being 'senior secured obligations' means these notes rank high in priority for repayment. They are equal in payment rights to other senior debts of the Issuers and are backed by specific collateral, making them effectively senior to unsecured debt and future second lien obligations to the extent of the collateral's value.