The Firm represented Seagate Technology in a registered offering of $1.5 billion aggregate principal amount of senior notes. The notes were issued in three tranches: three year LIBOR + 84 bps floating rate tranche, five-year 6.375% fixed rate tranche and a ten-year 6.800% fixed rate tranche. While Moody’s and S&P rated the notes below investment grade, Seagate was able to issue the notes with investment grade covenants. The notes were issued by Seagate Technology HDD Holdings, a direct wholly-owned subsidiary of Seagate Technology, and guaranteed by Seagate Technology on a full and unconditional basis.
Seagate intends to use the net proceeds from the offering to redeem all of its outstanding 8% senior notes due 2009 as well as a portion of Seagate’s previously announced $2.5 billion stock repurchase program.
Morgan Stanley, JPMorgan and Goldman, Sachs & Co. acted as joint book-running managers of the offering.
In connection with its engagement, the Firm also represented Seagate in connection with amending its senior unsecured revolving credit facilities, providing for borrowings of up to $500 million with a five year maturity. Seagate may use borrowings under this facility from time to time to fund, among other things, share repurchases.
The Simpson Thacher team included Bill Hinman, Gregory King, Louis Lehot, Véronique Laughlin, Ben Applestein in Palo Alto, and Marissa Wesely and Vanessa Bressler in New York.