Summary
Western Digital Corporation (WDC) announced significant financing and capital allocation activities via a Form 8-K filed on January 29, 2018. The company proposed concurrent offerings of $2.3 billion in senior notes due 2026 and $1.0 billion in convertible senior notes due 2024, totaling $3.3 billion in new debt. These offerings are intended to support a broader refinancing and capital management strategy. The company also plans to secure a new $5.022 billion Term Loan A-1 facility to replace its existing Term Loan A, extending its maturity profile. Additionally, WDC aims to extend its revolving credit facility maturity and potentially amend its senior credit facilities for greater flexibility and potentially lower interest rates. Concurrently, WDC announced plans to repurchase up to $500 million of its common stock, signaling a commitment to shareholder returns, and a tender offer to purchase all outstanding 10.500% senior unsecured notes due 2024.
Key Highlights
- 1Proposed concurrent offerings of $2.3 billion senior notes due 2026 and $1.0 billion convertible senior notes due 2024.
- 2Plans to issue a new $5.022 billion Term Loan A-1 facility maturing in 2023, replacing the existing $4.022 billion Term Loan A maturing in 2021.
- 3Intends to extend the maturity of its revolving credit facility by approximately two years to 2023.
- 4Seeking amendments to senior credit facilities for increased covenant flexibility and potential interest rate reductions.
- 5Announced a plan to repurchase up to $500 million of its common stock.
- 6Launching a cash tender offer to purchase any and all outstanding 10.500% senior unsecured notes due 2024.
- 7The notes offerings are separate and not contingent on each other.