Summary
Western Digital Corporation (WDC) filed an 8-K on May 15, 2018, primarily to disclose an amendment to its existing Loan Agreement. This amendment, labeled Amendment No. 8, involved a significant financial restructuring of its U.S. dollar-denominated term B-3 loans. The company replaced these outstanding loans with new U.S. dollar-denominated term B-4 loans totaling approximately $2.46 billion. This refinancing results in a reduction of the applicable interest rate margins. Specifically, the margin for LIBOR borrowings decreased from 2.00% to 1.75%, while the margin for base rate borrowings decreased from 1.00% to 0.75%. The company also included a standard provision for a 1.00% prepayment premium on the new loans if repriced within six months. These changes indicate an effort by Western Digital to optimize its borrowing costs and manage its debt structure.
Key Highlights
- 1Western Digital entered into Amendment No. 8 to its Loan Agreement on May 15, 2018.
- 2The amendment facilitates the settlement of existing U.S. dollar-denominated term B-3 loans.
- 3New U.S. dollar-denominated term B-4 loans were issued with a principal amount of approximately $2.46 billion.
- 4Interest rate margins on the new loans have been reduced: from 2.00% to 1.75% for LIBOR borrowings and from 1.00% to 0.75% for base rate borrowings.
- 5A 1.00% prepayment premium is applicable to the new term B-4 loans if repriced within six months of closing.
- 6The new term B-4 loans have a maturity date of April 29, 2023, with quarterly amortization payments of 0.25%.
- 7The new loans are guaranteed by existing guarantors and secured by the same collateral as previous loans.