Summary
Hewlett Packard Enterprise (HPE) announced on September 4, 2019, the pricing of a significant debt offering totaling $1.5 billion. This offering consists of $1 billion in 2.250% notes due 2023 and $500 million in floating rate notes due 2021. The primary purposes of this capital raise are to refinance existing debt, specifically its 2.100% notes due 2019, and to fund a portion of its previously announced acquisition of Cray Inc. This strategic move demonstrates HPE's proactive approach to managing its capital structure and financing key growth initiatives.
Key Highlights
- 1HPE priced a $1.5 billion debt offering: $1 billion of 2.250% notes due 2023 and $500 million of floating rate notes due 2021.
- 2Net proceeds will be used to repay $1.1 billion of 2.100% notes due 2019.
- 3The offering, along with cash and expected asset-backed notes, will help fund the acquisition of Cray Inc.
- 4The Notes are senior unsecured obligations of HPE, ranking equally with existing and future senior unsecured indebtedness.
- 5The offering is expected to close on September 13, 2019.
- 6The debt issuance is registered under HPE's existing Form S-3 registration statement.
Frequently Asked Questions
HPE is issuing a total of $1.5 billion in aggregate principal amount of notes. This includes $1 billion of 2.250% notes due 2023 and $500 million of floating rate notes due 2021.
The net proceeds are intended for three main purposes: (i) repaying $1.1 billion of 2.100% notes due 2019, (ii) funding the acquisition of Cray Inc. (along with cash on hand and proceeds from an expected asset-backed notes offering), and (iii) general corporate purposes.
The Notes are HPE's senior unsecured obligations. They rank equally in right of payment with all of HPE's existing and future senior unsecured indebtedness, meaning they are not backed by specific collateral but rely on the general creditworthiness of the company.
The issuance of the Notes is expected to close on September 13, 2019, subject to customary closing conditions.