Summary
This Form 8-K filing by Micron Technology, Inc. (MU) announces significant debt financing activities. On April 26, 2016, the company issued $1.25 billion in 7.500% Senior Secured Notes due 2023. These notes are secured by a first-priority lien on substantially all of Micron and its guarantors' domestic assets, pari passu with obligations under a new Credit Agreement. In conjunction with the notes issuance, Micron also entered into a new $750 million secured term loan Credit Agreement, which was fully drawn at closing. This new credit facility replaces a previous agreement dated December 2, 2014. Both the new notes and the credit agreement are secured by substantially all domestic assets of the company and its subsidiary guarantors, with liens ranking equally. The terms of these agreements include various covenants and events of default common to such debt instruments.
Key Highlights
- 1Micron issued $1.25 billion in 7.500% Senior Secured Notes due September 15, 2023.
- 2The company also entered into a new $750 million secured term loan Credit Agreement, fully drawn at closing.
- 3Both the new notes and the credit facility are secured by a first-priority lien on substantially all of Micron's and its guarantors' domestic assets.
- 4The liens securing the notes and the credit facility rank equally (pari passu).
- 5The company's previous Credit Agreement dated December 2, 2014, was terminated in connection with these new agreements.
- 6The new debt agreements contain standard covenants restricting certain actions by Micron and its subsidiaries, as well as events of default that could lead to acceleration of debt.
- 7The senior secured notes include provisions for redemption under certain circumstances, including a 'make-whole' premium before April 15, 2019, and declining redemption prices thereafter.