Western Digital tenders for 10˝% notes, plans to call 7 3/8% notes

By Wendy Van Sickle

Columbus, Ohio, Jan. 29 – Western Digital Corp. launched a cash tender offer and consent solicitation for its $3.35 billion of 10˝% notes due 2024 and also plans to redeem all of its outstanding 7 3/8% notes due 2023, according to two press releases.

Tender offer and consent bid

The company is offering to repurchase any and all of the 10˝% notes for a total consideration of $1,167.25 per $1,000 principal amount.

The total consideration includes a $30 early tender premium that will be paid only to holders who tender their notes and deliver valid consents to proposed amendments by the early deadline, 5 p.m. ET on Feb. 9.

The proposed amendments would amend the indenture to eliminate most of the covenants and certain default provisions applicable to the notes.

In addition, Western Digital said it intends to issue a conditional notice of redemption with respect to the notes.

No separate consent fee is being offered.

For the amendments to pass, consents must be delivered by holders of a majority of the principal amount of the outstanding notes.

The tender offer and consent solicitation will expire at 11:59 p.m. ET on Feb. 26.

Early settlement is expected to occur on Feb. 13 and final settlement on Feb. 27.

Tenders may be withdrawn until 5 p.m. ET on Feb. 9.

The tender offer and the consent solicitation are conditioned upon the company’s receipt of proceeds of at least $2.3 billion from a concurrent offering of senior notes due 2026.

Bank of America Merrill Lynch (888-292-0070 or 980-388-3636) is the dealer manager for the tender offer and consent solicitation.

Global Bondholder Services Corp. (212-430-3774 or 866-470-3700) is the depository and information agent.

2023 note retirement

Western Digital said it also plans to retire all of its 7 3/8% notes due 2023 with proceeds of a $1 billion offering of convertible notes due 2024, a new $5,022,000,000 term loan A-1 facility maturing 2023 and available cash on hand.

The company issued $1,875,000,000 of the 7 3/8% notes due 2023 in April of 2016.

Western Digital is an Irvine, Calif.-based developer and manufacturer of storage solutions that enable people to create, manage, experience and preserve digital content.

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