8-KMaterial AgreementsOther EventsExhibits & Filings

Seagate Technology Holdings plc 8-K Report, Material Agreement (May 25, 2023)

Filed May 25, 2023For Securities:STX

Summary

Seagate Technology Holdings plc (STX) announced a significant financing transaction through its indirect wholly owned subsidiary, Seagate HDD Cayman. The company has entered into a purchase agreement to issue and sell $1 billion in aggregate principal amount of Senior Notes, split between $500 million of 8.25% Senior Notes due 2029 and $500 million of 8.50% Senior Notes due 2031. This offering is being conducted through a private placement to qualified institutional buyers and non-U.S. persons, with an expected closing date of May 30, 2023. The primary use of the net proceeds from this issuance is to strengthen the company's balance sheet. Specifically, Seagate intends to use the funds to fully redeem its 4.875% Senior Notes due 2024, repay $450 million of outstanding term loans under its credit agreement, and for general corporate purposes. This strategic refinancing aims to extend debt maturities and manage interest expenses, demonstrating proactive financial management by the company.

Key Highlights

  • 1Seagate is issuing $1 billion in new senior unsecured notes: $500 million of 8.25% notes due 2029 and $500 million of 8.50% notes due 2031.
  • 2The notes are being issued by its subsidiary, Seagate HDD Cayman, and will be guaranteed by the parent company and another subsidiary.
  • 3Proceeds will be used to redeem $500 million of 4.875% Senior Notes due 2024.
  • 4The company will also use proceeds to repay $450 million of term loans.
  • 5Remaining proceeds are earmarked for general corporate purposes, including other debt repayment, capital expenditures, and investments.
  • 6The offering is structured as a private placement under Rule 144A and Regulation S.
  • 7The transaction is expected to close on May 30, 2023, subject to customary closing conditions.

Frequently Asked Questions

Seagate is issuing these new notes primarily to refinance its existing debt. The proceeds will be used to redeem its 4.875% Senior Notes due 2024 and repay a significant portion of its outstanding term loans. The company also plans to use funds for general corporate purposes, which could include other debt repayment, capital expenditures, and business investments.

Seagate is issuing $1 billion in aggregate principal amount of senior unsecured notes. This includes $500 million of 8.25% Senior Notes due 2029 and $500 million of 8.50% Senior Notes due 2031. These notes are obligations of its subsidiary, Seagate HDD Cayman, and are guaranteed by Seagate Technology Holdings plc and Seagate Technology Unlimited Company.

This offering effectively extends the maturity of a portion of Seagate's debt and potentially lowers its overall interest expense, depending on the terms of the new debt compared to the debt being refinanced. By redeeming the 2024 notes and repaying term loans, the company is proactively managing its capital structure and improving its liquidity position. The use of proceeds for general corporate purposes also provides flexibility for future strategic initiatives.

The notes are being sold in a private placement to persons reasonably believed to be qualified institutional buyers in the U.S. under Rule 144A and to non-U.S. persons outside the U.S. under Regulation S. This means the offering is not being made to the general public.