HP Enterprise eyes $16 billion senior debt, revolver ahead of split

By Marisa Wong

Morgantown, W.Va., Sept. 4 – Hewlett Packard Enterprise Co. expects to issue new notes in connection with its separation from Hewlett-Packard Co., according to an 8-K filing with the Securities and Exchange Commission.

The company also anticipates entering into a $4 billion unsecured revolving credit facility.

Hewlett Packard Enterprise may issue the Rule 144A/Regulation S senior notes in combination with commercial paper or other short-term debt.

The new issues and the revolver would be completed prior to the date on which Hewlett-Packard intends to distribute shares of Hewlett Packard Enterprise common stock to holders of Hewlett-Packard stock in connection with the separation. Hewlett Packard Enterprise would have total debt of about $16 billion outstanding as of the distribution date.

Hewlett Packard Enterprise may issue a portion of the senior notes to Hewlett-Packard as partial consideration for the transfer of assets from the parent company and not for cash. Proceeds from notes not issued to Hewlett-Packard would be used to finance the payment of a distribution to Hewlett-Packard in connection with the separation.

Hewlett-Packard plans to use a portion of the cash distribution to redeem or repurchase some of its outstanding notes. If Hewlett-Packard receives senior notes issued by Hewlett Packard Enterprise, the parent company would exchange those new senior notes for its outstanding notes.

Hewlett Packard Enterprise is currently Hewlett-Packard’s wholly owned subsidiary focused on enterprise technology infrastructure, software, services and financing. The information technology company is based in Palo Alto, Calif.

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