Seagate HDD Cayman, a subsidiary of Seagate Technology (NASDAQ:) Holdings plc (NASDAQ: STX), announced on Wednesday its intention to offer up to $1.3 billion in aggregate principal amount of exchangeable senior notes due 2028, subject to market and other conditions. The notes will be offered in a private placement to qualified institutional buyers under Rule 144A of the amended Securities Act of 1933.
The company also plans to grant the initial purchasers an option to purchase an additional $200 million aggregate principal amount of notes within a 13-day period beginning on the day the notes are first issued. This is designed to cover potential over-allotments. Both Seagate and Seagate Technology Unlimited Company are expected to guarantee the notes.
The conditions under which the notes can be exchanged will be determined at the time of pricing of the offering. Holders will have the option to exchange their notes for cash up to the aggregate principal amount, or for cash, ordinary shares of Seagate, or a combination of both, should Seagate’s conversion obligation exceed this principal amount.
In relation to the pricing of these notes, Seagate HDD Cayman and Seagate are anticipated to enter into privately negotiated capped call transactions with one or more initial purchasers or their respective affiliates and/or other financial institutions. These transactions will cover the same number of Seagate’s ordinary shares that will initially underlie the notes and have an expiration date coinciding with the maturity date of the notes.
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