8-KMaterial AgreementsExhibits & Filings

Workday, Inc. 8-K Report, Material Agreement (Apr 1, 2022)

Filed April 1, 2022For Securities:WDAY

Summary

This 8-K filing by Workday, Inc. (WDAY) details the company's significant debt financing activity, specifically the issuance and sale of $3.0 billion in aggregate principal amount of senior notes. These notes are comprised of three tranches with varying maturity dates and fixed interest rates: $1.0 billion of 3.500% notes due 2027, $750.0 million of 3.700% notes due 2029, and $1.25 billion of 3.800% notes due 2032. The net proceeds, estimated at approximately $2.98 billion after expenses, are intended for general corporate purposes. A significant portion of these proceeds will be used to repay existing debt, including $693.8 million under its senior unsecured term loan facility and potentially the $1.15 billion outstanding balance of its 0.25% convertible senior notes due 2022. The remaining funds may be allocated to working capital, capital expenditures, and strategic initiatives, with pending uses to be invested in high-quality, interest-bearing securities or held as cash.

Key Highlights

  • 1Workday completed an underwritten public offering of $3.0 billion in senior notes.
  • 2The offering consists of three tranches: 3.500% notes due 2027 ($1.0 billion), 3.700% notes due 2029 ($750.0 million), and 3.800% notes due 2032 ($1.25 billion).
  • 3Estimated net proceeds from the offering are approximately $2.98 billion.
  • 4Proceeds are designated for general corporate purposes, including repaying $693.8 million of existing term loan debt.
  • 5The company may also use proceeds to repay its $1.15 billion convertible senior notes due October 2022.
  • 6The Notes are senior unsecured obligations, ranking equally with other unsecured and unsubordinated debt.
  • 7The issuance includes provisions for a mandatory repurchase offer at 101% of principal in the event of a Change of Control Triggering Event.

Frequently Asked Questions

The primary purpose of this $3.0 billion debt issuance is to fund general corporate purposes. This includes repaying existing debt obligations, specifically approximately $693.8 million under its senior unsecured term loan facility and potentially its $1.15 billion convertible senior notes due 2022. Remaining proceeds may be used for working capital, capital expenditures, and strategic investments.

The offering includes three series of notes: $1.0 billion of 3.500% notes due April 1, 2027; $750.0 million of 3.700% notes due April 1, 2029; and $1.25 billion of 3.800% notes due April 1, 2032. Interest is payable semi-annually in arrears.

Pending their use for general corporate purposes, Workday intends to invest the net proceeds in investment-grade, interest-bearing securities. This includes options like money market funds, certificates of deposit, corporate debt, U.S. government obligations, or term deposits, as well as holding cash. Short-term borrowings may also be reduced.

In the event of a 'Change of Control Triggering Event,' Workday will be required to make an offer to purchase all or any part of the Notes at a price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest, subject to certain exceptions. This provides a layer of protection for noteholders.