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Western Digital flexes term loan B debt to Libor/Euribor plus 550 bps
By Sara Rosenberg
New York, March 29 – Western Digital Corp. lifted pricing on its $4.2 billion seven-year covenant-light term loan B and $550 million equivalent euro-denominated seven-year covenant-light term loan B to Libor/Euribor plus 550 basis points from talk of Libor/Euribor plus 450 bps to 475 bps, according to a market source.
Also, the original issue discount on the term loan B debt widened to 97 from 98.5, the source said.
The B loans still have a 0.75% floor and 101 soft call protection for one year.
Commitments are due at 11 a.m. ET on Wednesday, the source added.
The company’s $9.5 billion credit facility (Ba1/BBB-/BBB-) also includes a $1 billion five-year revolver and a $3.75 billion five-year term loan A.
J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC and RBC Capital Markets LLC are the leads on the debt.
Proceeds will be used to help fund the acquisition of SanDisk Corp. and refinance existing debt at both companies.
Other funds for the transaction are expected to come from Western Digital stock and from $1.5 billion senior secured notes due 2023 and $4.1 billion senior unsecured notes due 2024.
Under the agreement, SanDisk is being bought for $78.80 per share for a total equity value of about $17 billion. Assuming no closing cash shortfall, Western Digital will pay $67.50 in cash and 0.2387 of a share of Western Digital common stock per share of SanDisk common stock.
Closing is expected in the second quarter, subject to regulatory approval in China and other customary conditions.
Western Digital is an Irvine, Calif.-based developer and manufacturer of storage solutions that enable people to create, manage, experience and preserve digital content. SanDisk is a Milpitas, Calif.-based provider of flash storage solutions.
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