Summary
Seagate Technology Holdings plc (STX) filed an 8-K on September 20, 2006, detailing significant financing activities. The company announced the completion of a substantial debt offering totaling $1.5 billion, comprised of $300 million in Floating Rate Senior Notes due 2009, $600 million in 6.375% Senior Notes due 2011, and $600 million in 6.800% Senior Notes due 2016. These notes are unsecured and rank equally with other senior unsecured indebtedness of Seagate HDD, with the parent company providing an unconditional guarantee. In conjunction with this new debt issuance, Seagate also announced the immediate redemption of its $400 million aggregate principal amount of 8% Senior Notes due 2009. This strategic move, which includes a 4% redemption premium, effectively replaces older, higher-cost debt with new financing. Additionally, Seagate amended and restated its credit facility, establishing a $500 million senior unsecured revolving credit facility due to mature in 2011. This facility, which remains undrawn at the time of the filing, provides financial flexibility.
Key Highlights
- 1Seagate Technology HDD Holdings completed a new debt offering of $1.5 billion across three tranches: $300M Floating Rate Notes due 2009, $600M 6.375% Notes due 2011, and $600M 6.800% Notes due 2016.
- 2The company is calling for the full redemption of its outstanding $400 million aggregate principal amount of 8% Senior Notes due 2009.
- 3The redemption of the 8% Senior Notes due 2009 will occur on October 25, 2006, at a price of $1,040 per $1,000 principal amount plus accrued interest.
- 4Seagate amended and restated its credit agreement to provide a $500 million senior unsecured revolving credit facility maturing on September 19, 2011.
- 5The new credit facility allows for up to $100 million in letters of credit and was undrawn at the time of filing.
- 6The new senior notes are unsecured and guaranteed by Seagate Technology plc.
- 7The company does not expect significant early termination penalties beyond the stated redemption premium for the 8% Senior Notes.