01—Abstract
Summary
Summary of the 8-K filed March 6, 2024. Cited figures are marked; the original filing is the authoritative source.
On March 4, 2024, Dell Technologies Inc. (through its subsidiaries Dell International L.L.C. and EMC Corporation, with Dell Technologies Inc., Denali Intermediate Inc. and Dell Inc. as guarantors) entered into an underwriting agreement to issue $1.0 billiona of 5.400% Senior Notes due April 15, 2034.
The notes priced at 99.802%b of par, implying a yield to maturity of 5.425% and a spread of T+120 basis points over the 4.000% UST due February 15, 2034. Ratings assigned to the notes are Baa2 / BBB / BBB from Moody's, S&P and Fitch. Closing is expected March 18, 2024, subject to customary conditions.
The company intends to use the net proceeds to redeem a portion of its 6.020%c Senior Notes due 2026. Because the proceeds are directed at refinancing higher-coupon debt, the transaction is best read as a liability-management step that swaps 2026 paper for longer-dated, lower-coupon paper rather than as new leverage or a signal of incremental borrowing needs. The filing does not disclose the amount of the 2026 notes to be redeemed, so the net change in total debt cannot be determined from this document alone.
Investors should note the notes are senior unsecured obligations jointly and severally guaranteed by Dell Technologies Inc., Denali Intermediate and Dell Inc., and that they are sold under an automatic shelf registration (File No. 333-269159) on Form S-3. The agreement includes customary change-of-control provisions requiring an offer at 101%d of principal, make-whole redemption at T+20 bps before January 15, 2034, and par call thereafter. The 8-K itself is a transactional disclosure with no new operating results or guidance.
02—Key points
Key Highlights
- Issuance of $1.0 billion of 5.400% Senior Notes due April 15, 2034, priced at 99.802% of par.
- Yield to maturity of 5.425%, set at T+120 bps over the 4.000% UST due February 15, 2034.
- Net proceeds are earmarked to redeem a portion of the company's 6.020% Senior Notes due 2026, a refinancing that extends maturities and lowers coupon cost.
- Notes are senior unsecured and jointly and severally guaranteed by Dell Technologies Inc., Denali Intermediate Inc. and Dell Inc.
- Ratings assigned: Baa2 (Moody's), BBB (S&P), BBB (Fitch), which are investment grade.
- Closing expected March 18, 2024 (T+10), subject to customary conditions.
- Filing is a transactional disclosure under Item 8.01 with no new operating results, earnings, or guidance.
03—Questions
Frequently Asked Questions
How much debt is Dell raising and at what cost?
Dell is issuing $1.0 billion of 5.400% Senior Notes due 2034 at 99.802% of par, which equates to a 5.425% yield to maturity. The spread is T+120 basis points over the 4.000% 10-year Treasury benchmark.
Why is Dell issuing these notes?
The issuers intend to use the net proceeds to redeem a portion of their 6.020% Senior Notes due 2026. The filing does not specify the amount being redeemed, so the net effect on total debt cannot be determined from this document.
Are these notes secured, and who guarantees them?
No, the notes are senior unsecured obligations. They are guaranteed jointly and severally by Dell Technologies Inc., Denali Intermediate Inc. and Dell Inc.
What protections do noteholders have if control of Dell changes?
Upon a Change of Control Triggering Event, the issuers must offer to repurchase the notes at 101% of principal plus accrued and unpaid interest. Early redemption is available at a make-whole premium (T+20 bps) before January 15, 2034, and at par on or after that date.
When will the offering close and how was it registered?
Closing is expected March 18, 2024, subject to customary conditions. The notes were sold under an automatic shelf registration statement on Form S-3 (File No. 333-269159) with a base prospectus dated January 9, 2023.
04—Continue