8-KMaterial AgreementsShareholder MattersRegulation FD+1

WESTERN DIGITAL CORP 8-K Report, Agreement Terminated (Mar 2, 2018)

Filed March 2, 2018For Securities:WDC

Summary

Western Digital Corporation (WDC) filed an 8-K report on March 2, 2018, detailing the termination of its material definitive agreements related to outstanding debt. Specifically, the company has completed the redemption of all its 7.375% senior secured notes due 2023 and has also satisfied and discharged its obligations related to its 10.500% senior unsecured notes due 2024, following a successful cash tender offer that purchased a significant principal amount of these notes. The company deposited the necessary funds, including make-whole premiums, to fully redeem these notes as of February 27, 2018 (for the 2023 Notes) and March 1, 2018 (for the 2024 Notes). This action effectively discharges Western Digital and its guarantors from all obligations under the respective indentures and releases any liens on collateral securing the 2023 Notes. This move indicates a significant deleveraging or refinancing activity by the company.

Key Highlights

  • 1Western Digital has fully redeemed all outstanding 7.375% senior secured notes due 2023.
  • 2The company has also satisfied and discharged all obligations related to its 10.500% senior unsecured notes due 2024.
  • 3A substantial principal amount of the 2024 Notes ($2,724,957,000) was accepted in a prior cash tender offer.
  • 4The redemption and discharge were completed by depositing sufficient funds, including make-whole premiums, by March 1, 2018.
  • 5This action releases Western Digital from its debt obligations under the respective indentures.
  • 6Liens on collateral securing the 2023 Notes have been released as a consequence of their redemption.

Frequently Asked Questions

This 8-K filing primarily reports on the termination of material definitive agreements, specifically the redemption and discharge of Western Digital's 2023 senior secured notes and 2024 senior unsecured notes. It signifies the company's fulfillment of its obligations related to these specific debt instruments.

The company deposited funds to cover the principal, accrued interest, and 'make-whole' premiums for the redeemed notes. While this reduces debt and interest expense going forward, it also involved a significant cash outlay and potentially premium payments, the exact amount of which is detailed in the tender offer and redemption notices referenced.

No, this filing only pertains to the termination of specific note issuances (the 2023 and 2024 Notes). Western Digital likely has other outstanding debt obligations that are not affected by these specific redemptions.

When a company 'satisfies and discharges' its debt, it means it has fulfilled all its obligations under the debt agreement, typically by depositing funds with a trustee to pay off the debt in full. This allows the company to be released from its covenants and any associated liens or guarantees related to that specific debt, even if the payment date is in the future.