8-KOther EventsExhibits & Filings

Workday, Inc. 8-K Report, Corporate Update (Jun 12, 2013)

Filed June 12, 2013For Securities:WDAY

Summary

Workday, Inc. (WDAY) announced on June 11, 2013, the pricing of two series of convertible senior notes. The company priced $310 million in aggregate principal amount of 0.75% Convertible Senior Notes due 2018 and $220 million in aggregate principal amount of 1.50% Convertible Senior Notes due 2020. This financing move is significant as it provides Workday with substantial capital, totaling $530 million initially, with the potential for an additional $70 million if the underwriters exercise their overallotment options. These notes are offered to qualified institutional buyers, indicating a focus on institutional investment. The issuance of convertible debt suggests Workday's strategy to fund growth and operations while potentially leveraging its stock performance in the future. The capital raised through this offering is expected to support Workday's ongoing business development, technological advancements, and market expansion. The relatively low coupon rates on the convertible notes (0.75% and 1.50%) reflect market confidence in Workday's financial stability and growth prospects. Investors should monitor how this new capital is deployed and its impact on the company's revenue growth, profitability, and competitive positioning in the enterprise software market.

Key Highlights

  • 1Workday priced $310 million of 0.75% Convertible Senior Notes due 2018.
  • 2Workday priced $220 million of 1.50% Convertible Senior Notes due 2020.
  • 3The company has the option to purchase an additional $40 million of 2018 Notes and $30 million of 2020 Notes.
  • 4Total initial proceeds from the note offering amount to $530 million.
  • 5The notes are being sold to qualified institutional buyers under Rule 144A.
  • 6This filing includes a press release detailing the note pricing as Exhibit 99.1.

Frequently Asked Questions

The issuance of convertible senior notes provides Workday with capital to fund its business operations, growth initiatives, and technological development. The press release attached as an exhibit to this filing likely details the specific uses of proceeds, but generally, such capital raises are for expanding market share, investing in R&D, or general corporate purposes.

The company issued two series: $310 million of 0.75% Convertible Senior Notes due 2018 and $220 million of 1.50% Convertible Senior Notes due 2020. These are 'convertible' notes, meaning they can be converted into shares of Workday's common stock under certain conditions, and 'senior' notes, indicating their priority in the capital structure.

The notes are being sold to qualified institutional buyers (QIBs) pursuant to Rule 144A of the Securities Act of 1933. This indicates that the offering is a private placement targeted at large, sophisticated investors, suggesting a level of confidence in Workday's financial standing and growth prospects from the institutional investment community.

In addition to the initial $530 million principal amount ($310 million for the 2018 Notes and $220 million for the 2020 Notes), Workday granted the initial purchasers options to buy an additional $40 million of the 2018 Notes and $30 million of the 2020 Notes. If these options are fully exercised, the total aggregate principal amount raised could reach $600 million.