Published on 12/3/2020 in the Prospect News High Yield Daily.
New Issue: Seagate prices $1 billion senior notes in two tranches
By Paul A. Harris
Portland, Ore., Dec. 3 – Seagate Technology plc priced $1 billion of senior notes (Ba1/BB+/BB+) in two tranches on Thursday, according to market sources.
A $500 million tranche of notes due July 15, 2029 priced at par to yield 3 1/8%. The yield printed at the tight end of yield talk in the 3¼% area. Initial talk was in the high 3% area to 4%
A $500 million tranche of notes due July 15, 2031 priced at par to yield 3 3/8%. The yield printed at the tight end of yield talk in the 3½% area. Initial talk was in the low 4% area.
Left lead bookrunner Morgan Stanley & Co. LLC will bill and deliver. Joint bookrunners were BofA Securities Inc., MUFG, Scotia Capital (USA) Inc., Wells Fargo Securities LLC, KKR and BNP Paribas Securities Corp.
The issuing entity will be Seagate HDD Cayman, a subsidiary of Seagate Technology.
The Cupertino, Calif.-based data storage company plans to use the proceeds to repurchase ordinary shares and for general corporate purposes, which may include debt repayment, capital expenditures and other investments in the business.
| Issuer: | Seagate HDD Cayman
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| Amount: | $1 billion
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| Securities: | Senior notes
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| Left lead bookrunner: | Morgan Stanley & Co. LLC (bill and deliver)
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| Joint bookrunners: | BofA Securities Inc., MUFG, Scotia Capital (USA) Inc., Wells Fargo Securities LLC, KKR and BNP Paribas Securities Corp.
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| Co-managers: | DBS, ICBC Standard Bank plc, Mizuho Securities USA Inc., OCBC, RAM, SMBC Nikko Securities America Inc. and U.S. Bancorp Investments Inc.
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| Trade date: | Dec. 3
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| Settlement date: | Dec. 8
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| Ratings: | Moody's: Ba1
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| S&P: BB
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| Fitch: BB+
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| Distribution: | Rule 144A and Regulation S with registration rights
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| Marketing: | Roadshow
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|
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| Notes due 2029
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| Amount: | $500 million
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| Maturity: | July 15, 2029
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| Coupon: | 3 1/8%
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| Price: | Par
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| Yield: | 3 1/8%
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| Spread: | 232 bps
|
| First call: | Make-whole call at Treasuries plus 50 bps until Jan. 15, 2024, then callable at 101.56
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| Equity clawback: | 40% at 103.125 until Jan. 15, 2024
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| Price talk: | 3¼% area
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|
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| Notes due 2031
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| Amount: | $500 million
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| Maturity: | July 15, 2031
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| Coupon: | 3 3/8%
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| Price: | Par
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| Yield: | 3 3/8%
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| Spread: | 251 bps
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| First call: | Make-whole call at Treasuries plus 50 bps until Jan. 15, 2026, then callable at 101.688
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| Equity clawback: | 40% at 103.375 until Jan. 15, 2026
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| Price talk: | 3½% area
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