Western Digital Announces Pricing of $2.3 Billion of Senior Notes Due 2026 and $1.0 Billion of Convertible Senior Notes Due 2...
January 30 2018 - 11:23PM
Business Wire
Western Digital Corporation (NASDAQ: WDC) (“Western Digital” or
the “company”) today announced that it has priced its concurrent
offerings of $2.3 billion aggregate principal amount of senior
unsecured notes due 2026 (the “2026 notes”) and $1.0 billion
aggregate principal amount of convertible senior notes due 2024
(the “2024 convertible notes” and, together with the 2026 notes,
the “notes”). The notes will be issued by Western Digital, and
guaranteed, jointly and severally on a senior basis, by certain of
Western Digital’s subsidiaries.
The 2026 notes were offered in a public offering, and will bear
interest at a rate of 4.750% per annum. Western Digital intends to
use the net proceeds of the 2026 notes offering, together with
available cash on hand, to fund its concurrent cash tender (the
“tender offer”) to purchase any and all of its currently
outstanding 10.500% senior unsecured notes due 2024. BofA Merrill
Lynch and J.P. Morgan Securities LLC are acting as lead
book-running managers, and RBC Capital Markets, Mizuho Securities
and Wells Fargo Securities are acting as book-running managers for
the 2026 notes offering.
The 2024 convertible notes were offered in a private offering to
only qualified institutional investors (“QIBs”) in accordance with
Rule 144A under the Securities Act of 1933, as amended (the
“Securities Act”), and will bear interest at a rate of 1.50% per
annum. The company granted the initial purchasers a 30-day option
to purchase up to an additional $100 million aggregate principal
amount of 2024 convertible notes. The company intends to use the
net proceeds of the offering of the 2024 convertible notes,
together with the net proceeds from the previously announced Term
Loan A-1 facility and available cash on hand, to redeem all of its
currently outstanding 7.375% senior secured notes due 2023 (the
“2023 secured notes”), including all accrued interest, related
premiums, fees, and expenses. The 2024 convertible notes will be
convertible into cash, shares of Western Digital’s common stock or
a combination thereof, at Western Digital’s election, at an initial
conversion price of approximately $121.91 per share (which
represents a premium of approximately 40% to the $87.08 per share
closing price of Western Digital’s common stock on Jan. 30, 2018).
The company may redeem all or part of the 2024 convertible notes,
at its option, on or after Feb. 5, 2021 if the company’s common
stock price has been at least 130% of the conversion price for at
least 10 trading days out of a 20-day consecutive trading
period.
The company agreed to repurchase approximately $153.5 million of
its common stock concurrently with the offering of the 2024
convertible notes offering in privately negotiated transactions, at
a purchase price per share equal to the $87.08 per share closing
price of Western Digital’s common stock on Jan. 30, 2018 with
available cash on hand.
The sale of both the 2026 notes and the 2024 convertible notes
is expected to be completed on Feb. 13, 2018, subject to customary
closing conditions.
The 2024 convertible notes, the common stock, if any,
deliverable upon conversion of the 2024 convertible notes and the
related guarantees have not been and will not be registered under
the Securities Act or the securities laws of any other
jurisdiction. They may not be offered or sold in the United States
or to, or for the benefit of, U.S. persons absent registration
under, or an applicable exemption from, the registration
requirements of the Securities Act.
The 2026 notes and 2024 convertible notes offerings are being
conducted as separate offerings. Neither offering is contingent
upon the other.
The company has filed a registration statement (including a
prospectus) with the Securities and Exchange Commission (the “SEC”)
for the 2026 notes offering. Before you invest, you should read the
prospectus in the registration statement and other documents the
company has filed with the SEC for more complete information about
the company and the offerings. You may obtain these documents for
free by visiting EDGAR on the SEC website at www.sec.gov, from BofA
Merrill Lynch, NC1-004-03-43, 200 North College Street, 3rd floor,
Charlotte, NC 28255-0001, Attn: Prospectus Department, or by email
at dg.prospectus_requests@baml.com or from J.P. Morgan Securities
LLC via Broadridge Financial Solutions, 1155 Long Island Avenue,
Edgewood, New York 11717, or by telephone at (866) 803-9204.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy the common stock, notes or any
other security, nor will there be any sale of the common stock,
notes or any other security in any state or jurisdiction in which
such an offer, solicitation or sale is not permitted. Any offer or
sale will be made only by means of a prospectus and, to the extent
applicable, a free writing prospectus which has or will be filed
with the SEC.
About Western Digital
Western Digital creates environments for data to thrive. The
company is driving the innovation needed to help customers capture,
preserve, access and transform an ever-increasing diversity of
data. Everywhere data lives, from advanced data centers to mobile
sensors to personal devices, our industry-leading solutions deliver
the possibilities of data. Western Digital® data-centric solutions
are marketed under the G-Technology™, HGST, SanDisk®, Tegile™,
Upthere™ and WD® brands. Financial and investor information is
available on the company's Investor Relations website.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements concerning the offering of senior notes.
These forward-looking statements are based on management’s current
expectations and are subject to risks and uncertainties that could
cause actual results to differ materially from those expressed or
implied in the forward-looking statements, including: volatility in
global economic conditions; uncertainties with respect to the
company’s business ventures with Toshiba; business conditions and
growth in the storage ecosystem; impact of competitive products and
pricing; market acceptance and cost of commodity materials and
specialized product components; actions by competitors; unexpected
advances in competing technologies; the development and
introduction of products based on new technologies and expansion
into new data storage markets; risks associated with acquisitions,
mergers and joint ventures; difficulties or delays in
manufacturing; impacts of new tax legislation; and other risks and
uncertainties listed in the company's filings with the SEC,
including the company’s Form 10-Q filed with the SEC on Nov. 7,
2017, to which your attention is directed. You should not place
undue reliance on these forward-looking statements, which speak
only as of the date hereof, and the company undertakes no
obligation to update these forward-looking statements to reflect
new events.
Western Digital, the Western Digital logo, G-Technology, HGST,
SanDisk, Tegile, Upthere and WD are registered trademarks or
trademarks of Western Digital Corporation or its affiliates in the
U.S. and/or other countries.
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version on businesswire.com: http://www.businesswire.com/news/home/20180130006545/en/
Western Digital Corp.Media Contact:Jim
Pascoe408.717.6999jim.pascoe@wdc.comorInvestor Contact:Bob
Blair949.672.7834robert.blair@wdc.com
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