Seagate talks $1.3 billion five-year exchangeables at 3.25%-3.75%, up 27.5%-32.5%

By Abigail W. Adams

Portland, Me., Sept. 7 – Seagate HDD Cayman plans to price $1.3 billion of five-year notes exchangeable for Seagate Technology Holdings plc shares after the market close on Thursday with price talk for a coupon of 3.25% to 3.75% and an initial exchange premium of 27.5% to 32.5%, according to a market source.

Morgan Stanley & Co. LLC (lead left), BofA Securities Inc., Wells Fargo Securities LLC and Scotia Capital (USA) Inc. are bookrunners for the Rule 144A offering, which carries a greenshoe of $200 million.

The notes are non-callable for three years and then subject to a 130% hurdle.

They will be guaranteed by Seagate Technology Holdings plc and Seagate Technology Unlimited Co.

The notes will be settled in cash up to the principal amount with any remainder to be settled in cash, ordinary shares of Seagate (Nasdaq: STX), or a combination of both at Seagate’s election.

In connection with the offering, the company will enter into capped call transactions with the transactions expected to cover the same number of shares underlying the convertible notes.

Proceeds will be used to repay existing debt, including portions of the company’s outstanding term loans and/or senior notes, and for other general corporate purposes. Other general corporate purposes may include repaying other outstanding debt, capital expenditures and other investments in the business.

Seagate is a Dublin, Ireland-based data storage company.

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