Summary
Seagate Technology Holdings plc (STX) announced on November 30, 2022, the issuance of approximately $750 million in aggregate principal amount of 9.625% Senior Notes due 2032. This issuance was part of an exchange offer for its existing senior notes due 2029 and 2031. The company increased the offering size from a previously announced $500 million, indicating strong investor demand or a strategic decision to raise more capital at favorable terms. The new notes are senior unsecured obligations of Seagate HDD Cayman, an indirect subsidiary, and are guaranteed by the parent company and STUC. These notes will rank equally with other senior unsecured indebtedness but are effectively subordinated to secured debt and structurally subordinated to non-guaranteeing subsidiaries. The issuance comes with a registration rights agreement, requiring Seagate to register the notes for resale or conduct an exchange offer if they are not freely transferable within 366 days of issuance, with potential for additional interest if registration defaults occur.
Key Highlights
- 1Seagate Technology Holdings plc issued approximately $750 million of 9.625% Senior Notes due 2032.
- 2The issuance was part of an exchange offer for outstanding 2029 and 2031 Senior Notes.
- 3The offering size was increased from an initial $500 million to $750 million.
- 4The new notes are guaranteed by the parent company and Seagate Technology Unlimited Company.
- 5The notes are senior unsecured, ranking equally with other senior unsecured debt but subordinated to secured debt.
- 6A registration rights agreement is in place, with provisions for additional interest in case of registration defaults.
- 7The company can redeem the notes at a 'make-whole' price before December 1, 2027, and at specified prices thereafter.