Western Digital Announces Redemption of All Outstanding 10.500% Senior Unsecured Notes Due 2024 & 7.375% Senior Secured Notes...
March 02 2018 - 3:18PM
Business Wire
Western Digital Corporation (NASDAQ: WDC) (“Western Digital” or
the “company”) today announced that, in connection with the
successful completion of previously disclosed transactions, it has
redeemed all of its outstanding 10.500% senior unsecured notes due
2024 (the “2024 Notes”) and on Feb. 27, 2018, all of its
outstanding 7.375% senior secured notes due 2023 (the “2023 Notes”
and collectively with the 2024 Notes, the “Existing Notes”) and
satisfied and discharged its obligations under the respective
indentures.
Western Digital’s previously announced cash tender offer to
purchase any and all of its outstanding 2024 Notes resulted in its
accepting for purchase $2,724,957,000 in aggregate principal amount
of the 2024 Notes as of the tender offer expiration date on Feb.
27, 2018. The redemption of the remaining 2024 Notes was funded by
net proceeds from Western Digital’s previously announced offering
of $2.3 billion aggregate principal amount of 4.750% senior notes
due 2026 (the “4.750% Notes”), which closed on Feb. 13, 2018,
together with available cash on hand. The redemption of the 2023
Notes was funded by net proceeds from the company’s previously
announced $1.0 billion aggregate principal amount of 1.50%
convertible senior notes due 2024, which closed on Feb. 13, 2018,
with initial purchasers exercising in full their option to purchase
an additional $100 million of the 1.50% convertible senior notes
due 2024 on Feb. 16, 2018, the proceeds of its previously announced
new $5.022 billion term loan A-1 facility maturing in 2023,
reflecting a $1.0 billion increase over its previous term loan A
facility, which closed on Feb. 27, 2018, and available cash on
hand.
In addition, as previously announced, on Feb. 27, 2018, Western
Digital obtained commitments for a $2.25 billion revolving credit
facility maturing 2023, reflecting a $750 million increase in the
size of its revolver, and borrowed $500 million thereunder to fund
a voluntary prepayment of its existing USD term B-3 loan.
As a result of these financing transactions, based on the
current capital structure and a current LIBOR rate of 1.67%, the
company expects to reduce its GAAP annual interest expense to
approximately $435 million to $440 million, compared to $808
million in the last twelve months ended Dec. 29, 2017. Annual
non-GAAP interest expense, which excludes approximately $25 million
to $30 million of noncash economic interest associated with the
company’s convertible notes, is expected to be approximately $410
million to $415 million.
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.
Non-GAAP Financial Measure
The company believes the presentation of non-GAAP interest
expense, when shown in conjunction with the corresponding GAAP
measure, provides useful information to investors for measuring the
company’s financing cost and comparing it against prior periods.
Specifically, the company believes non-GAAP interest expense
provides useful information to both management and investors as it
excludes certain noncash interest which is consistent with the
financial models and estimates published by many analysts who
follow the company and its peers and the company believes non-GAAP
interest expense along with the related GAAP interest expense
measure provide additional detail and comparability for assessing
the company’s results. Non-GAAP interest expense is one of the
primary indicators management uses for assessing the company’s
performance and planning and forecasting future periods. Non-GAAP
interest expense is not in accordance with, or an alternative for,
interest expense prepared in accordance with GAAP and may be
different from similarly titled measures used by other companies.
Non-GAAP interest expense should be considered in addition to
results prepared in accordance with GAAP, but should not be
considered a substitute for, or superior to, GAAP results.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
concerning expected annual interest expense savings. 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 Feb. 6,
2018, 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/20180302005667/en/
Company contacts:Western Digital Corp.Media Contact:Jim
Pascoe408.717.6999jim.pascoe@wdc.comorInvestor Contact:Bob
Blair949.672.7834robert.blair@wdc.com
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