By Abigail W. Adams
Portland, Me., Sept. 8 – Seagate HDD Cayman priced $1.3 billion of five-year notes exchangeable for Seagate Technology Holdings plc shares after the market close on Thursday at par at the midpoint of talk with a coupon of 3.5% and an initial exchange premium of 30%, according to a market source and a company news release.
Price talk was 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 until Sept. 8, 2026 and then subject to a 130% hurdle.
They are putable upon a fundamental change.
The notes will be guaranteed by Seagate Technology Holdings plc and Seagate Technology Unlimited Co.
They 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 entered into capped call transactions with a cap price of $107.8480, which represents a premium of 70% over the last reported sales price of stock.
The capped call transactions cover approximately the same number of shares underlying the convertible notes.
Approximately $1.1 billion of net proceeds, or $1.3 billion if the greenshoe is exercised in full, will be used to repay existing debt, including portions of the company’s outstanding term loans and/or senior notes.
Remaining proceeds will be used for other general corporate purposes, which may include repayment of other outstanding debt, capital expenditures and other investments in the business.
Seagate is a Dublin, Ireland-based data storage company.
| Issuer: | Seagate HDD Cayman
|
| Guarantors: | Seagate Technology Holdings plc and Seagate Technology Unlimited Co.
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| Amount: | $1.3 billion
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| Greenshoe: | $200 million
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| Issue: | Exchangeable senior notes for Seagate Technology Holdings plc shares
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| Maturity: | June 1, 2028
|
| Bookrunners: | Morgan Stanley & Co. LLC (lead left), BofA Securities Inc., Wells Fargo Securities LLC and Scotia Capital (USA) Inc.
|
| Coupon: | 3.5%
|
| Price: | Par
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| Yield: | 3.5%
|
| Exchange premium: | 30%
|
| Exchange price: | $82.47
|
| Exchange rate: | 12.1253
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| Call options: | Non-callable until Sept. 8, 2026 and then subject to a 130% hurdle
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| Put options: | Upon a fundamental change
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| Pricing date: | Sept. 7
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| Settlement date: | Sept. 13
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| Distribution: | Rule 144A
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| Talk: | Coupon of 3.25% to 3.75% and initial exchange premium of 27.5% to 32.5%
|
| Stock symbol: | Nasdaq: STX
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| Stock price: | $63.44 at market close Sept. 7
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| Market capitalization: | $13.19 billion
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