Summary
This 8-K filing from Seagate Technology Holdings plc, dated December 12, 2008, reports a significant event on December 10, 2008: the company drew down $350 million under its existing $500 million senior unsecured revolving credit facility. This action brings the total outstanding balance on the facility to approximately $400 million, which includes $350 million in loans and $50 million in outstanding letters of credit. The remaining undrawn commitment is approximately $100 million.
Key Highlights
- 1Seagate Technology borrowed $350 million on December 10, 2008, under its senior unsecured revolving credit facility.
- 2The total credit facility has a capacity of $500 million.
- 3Post-borrowing, the outstanding balance on the facility is approximately $400 million ($350 million in loans + $50 million in letters of credit).
- 4The remaining available credit under the facility is approximately $100 million.
- 5The borrowing is intended to enhance liquidity and cash position during a period of production capacity rationalization and cost structure improvement.
- 6The credit facility bears interest at a variable rate of LIBOR plus a margin of 62.5 basis points, subject to change based on Seagate's credit rating.
- 7Borrowings are prepayable without penalty, other than customary breakage costs.
Frequently Asked Questions
Seagate borrowed this amount to enhance its liquidity and cash position. This is occurring while the company is undertaking efforts to rationalize its production capacity and improve its cost structure, suggesting a need for immediate capital to manage these strategic adjustments.
After this borrowing, the total outstanding balance on the revolving credit facility is approximately $400 million. This comprises $350 million in loans and approximately $50 million in outstanding letters of credit.
The total committed amount of the revolving credit facility is $500 million. After the $350 million borrowing and accounting for the outstanding letters of credit, approximately $100 million remains undrawn and available for borrowing.
The borrowing accrues interest at a variable rate equal to LIBOR plus a margin of 62.5 basis points. This margin can change depending on Seagate's credit rating. Borrowings can be prepaid without penalty, except for standard breakage costs associated with LIBOR-based loans.