Summary
Western Digital Corporation (WDC) filed an 8-K on February 13, 2018, to report on significant financing activities and modifications to its existing debt structure. The company announced the closing of its offerings for $2.3 billion in 4.750% senior notes due 2026 and $1.0 billion in 1.50% convertible senior notes due 2024. These new debt issuances are governed by new indentures which include restrictive covenants for Western Digital and its subsidiaries concerning asset sales, mergers, liens, and incurring additional debt, although these covenants have limitations and exceptions. Furthermore, the filing details WDC's successful tender offer for its outstanding 10.500% senior unsecured notes due 2024. Following the acquisition of requisite consents, the company entered into a Second Supplemental Indenture. This amendment significantly alters the terms of the 2024 notes by eliminating substantially all restrictive covenants and certain events of default. These actions indicate a strategic move by Western Digital to reshape its debt profile and potentially gain more financial flexibility.
Key Highlights
- 1Western Digital closed offerings of $2.3 billion in 4.750% senior notes due 2026 and $1.0 billion in 1.50% convertible senior notes due 2024.
- 2The new notes were issued under separate indentures that impose restrictive covenants on Western Digital and its subsidiaries.
- 3These covenants limit activities such as consolidation, mergers, asset sales, creating liens, and incurring new debt.
- 4Western Digital successfully completed a tender offer for all its outstanding 10.500% senior unsecured notes due 2024.
- 5A Second Supplemental Indenture was entered into for the 2024 notes, eliminating substantially all restrictive covenants and certain events of default.
- 6The company issued press releases on February 13, 2018, announcing the closing of the notes offerings and the early results of the tender offer.