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Rackspace gives early results of exchange offer for 3½% notes
By Wendy Van Sickle
Columbus, Ohio, March 28 – Rackspace Technology, Inc. announced the early results of its exchange offer to holders of its 3½% first-priority senior secured notes due 2028 (Cusips: 750098AB1, U7502EAB0), according to a press release.
As of the early participation time, 5 p.m. ET on March 28, holders had tendered $133,271,000 principal amount of the existing notes.
Holders are being offered a combination of new notes and cash.
The new notes will have a 3½% coupon and will be considered first-priority senior secured notes due 2028. The issuer will be a new subsidiary of the company, Rackspace Finance, LLC.
Early tendering noteholders will receive $700 of exchange notes and $0.7875 in cash for each $1,000 note tendered.
Late tendering holders will receive $670 of exchange notes and $0.7875 in cash.
Unpaid interest up to March 12 will be paid in cash. Interest on the new notes will accrue from March 12.
The withdrawal deadline was also 5 p.m. ET on March 28.
The exchange offer expires at 5 p.m. ET on April 11.
Tendering noteholders will have the right to purchase new first-lien first-out term loans.
For each $1,000 note tendered, holders may pay $101.02436 for $102.04481 of the new term loans (at a discount of 1%).
Jefferies Capital Services, LLC is the fronting lender for the funding offer.
Noteholders who participate in the funding offer for the term loans need to submit lender documentation by 11:59 p.m. ET on March 28.
Early settlement of the exchange offer is planned for April 2.
Final settlement is expected on April 15.
The exchange offer is open to Rule 144A and Regulation S holders. The offer was announced on March 14.
Epiq Corporate Restructuring, LLC is the transaction agent for the offers (tabulation@epiqglobal.com, https://epiqworkflow.com/cases/RackspaceEL)
Rackspace is a San Antonio-based cloud computing services company.
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