Dell Technologies Inc. - Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Dell Technologies Inc. on March 6, 2019. The filing details a significant capital market event involving the commencement and pricing of a private offering of First Lien Notes by two wholly-owned subsidiaries, Dell International L.L.C. and EMC Corporation.
Key Financial Metrics and Transaction Details
- Debt Issuance: The company priced a total of $4.0 billion in aggregate principal amount of First Lien Notes, an increase of $500 million from the initial announcement.
- Note Structure:
- $1.0 billion of 4.000% First Lien Notes due 2024.
- $1.75 billion of 4.900% First Lien Notes due 2026.
- $1.75 billion of 5.300% First Lien Notes due 2029.
- Debt Redemption: The company elected to redeem all $3.75 billion of outstanding 3.480% first lien notes due 2019.
- Refinancing Activities: Concurrent refinancing includes rolling over the Term Loan A-2 facility into a new five-year Term Loan A-6 facility and increasing the margin loan facility by $650 million.
- Liquidity Impact: The company expects no material impact on the aggregate principal amount of indebtedness outstanding following these transactions.
Material Changes and Use of Proceeds
The primary material change is the restructuring of the company's debt maturity profile. Net proceeds from the new Notes and concurrent refinancings will be used to:
- Redeem or repay the outstanding 2019 first lien notes.
- Repay outstanding amounts under the Term Loan A-5 facility maturing in 2019.
- Cover related premiums, accrued interest, fees, and expenses within 90 days of closing.
Outlook, Risks, and Contingencies
The offering is expected to close on March 20, 2019, subject to customary closing conditions. The redemption of the 2019 first lien notes is scheduled for March 21, 2019, and is conditioned upon the receipt of sufficient net proceeds from the new offering. The concurrent refinancings are not conditioned on the closing of the Notes offering, nor is the Notes offering conditioned on the refinancings. The offering was made privately to qualified institutional buyers under Rule 144A or outside the U.S. under Regulation S.
Investor Verification Checklist
- Verify the closing of the $4.0 billion Notes offering on or before March 20, 2019.
- Confirm the successful redemption of the $3.75 billion 2019 first lien notes on March 21, 2019.
- Monitor the execution of the Term Loan A-2 to Term Loan A-6 rollover and the $650 million margin loan increase.
- Review the final impact on the company's aggregate indebtedness and interest expense profile post-closing.