Summary
Dell Technologies Inc. (DELL) announced on April 9, 2020, the successful closing of a significant debt offering totaling $2.25 billion in aggregate principal amount across three series of first lien notes: $1 billion of 5.850% notes due 2025, $500 million of 6.100% notes due 2027, and $750 million of 6.200% notes due 2030. These notes were issued by Dell International L.L.C. and EMC Corporation, subsidiaries of Dell Technologies, and were offered in a private placement to qualified institutional buyers and outside the U.S. pursuant to Regulation S. These newly issued notes are senior secured obligations, ranking equally with existing and future senior indebtedness of the issuers and senior to any subordinated debt. They are guaranteed by Dell Technologies Inc. on an unsecured basis and by Denali Intermediate, Inc., Dell Inc., and certain other subsidiaries on a secured basis. The notes are secured on a first-priority basis by substantially all assets of the issuers and guarantors that also secure the company's senior secured credit facilities, placing them effectively senior to unsecured and second lien debt. This offering represents a strategic move by Dell to manage its capital structure and secure long-term funding, with proceeds intended for general corporate purposes.
Key Highlights
- 1Dell Technologies Inc. closed a $2.25 billion offering of senior secured first lien notes across three maturities: 2025, 2027, and 2030.
- 2The notes carry coupon rates of 5.850% (2025), 6.100% (2027), and 6.200% (2030).
- 3The issuance was conducted as a private placement to Qualified Institutional Buyers (QIBs) and non-U.S. investors under Regulation S.
- 4The notes are senior secured obligations and are effectively senior to unsecured and second lien debt, secured by substantially all assets that also secure the company's senior secured credit facilities.
- 5The notes are guaranteed by Dell Technologies Inc. (unsecured) and certain subsidiaries (secured).
- 6The company entered into a Registration Rights Agreement to facilitate an exchange offer for registered notes within five years.
- 7The net proceeds from the offering are intended for general corporate purposes.