Item 1.01 Entry into a Material Definitive Agreement.
On October 14, 2021, Seagate Technology Holdings public limited company (the
"Company") and its subsidiary Seagate HDD Cayman (the "Borrower") entered into
an amendment (the "Amendment") to the Credit Agreement, dated as of February 20,
2019, by and among the Company, the Borrower, the lenders party thereto, and The
Bank of Nova Scotia, as administrative agent (as amended from time to time, the
"Credit Agreement"). The Amendment provides for a new term loan facility in the
aggregate principal amount of $1,200.0 million to be extended in two tranches of
$600.0 million each ("Term Loan A1" and "Term Loan A2"). The proceeds of the
Term Loan A1 and Term Loan A2 may be used for general corporate purposes, to
refinance/repay the Borrower's existing Term Loan and to refinance/repay the
Borrower's Senior Notes due March 2022. Term Loan A1 and Term Loan A2 are
guaranteed by the same guarantors that guarantee the existing obligations under
the Credit Agreement.
The Term Loan A1 is repayable in quarterly installments beginning on
December 31, 2022 and is scheduled to mature on September 16, 2025. The Term
Loan A1 will bear interest at a rate of LIBOR plus a variable margin ranging
from 1.125% to 2.375% that will be determined based on the corporate credit
rating of the Borrower or one of its parent entities. The Term Loan A2 is
repayable in quarterly installments beginning on December 31, 2022 and is
scheduled to mature on July 30, 2027. The Term Loan A2 will bear interest at a
rate of LIBOR plus a variable margin ranging from 1.25% to 2.5% that will be
determined based on the corporate credit rating of the Borrower or one of its
parent entities. Term Loan A1 and Term Loan A2 were each drawn in full on the
closing date for the Amendment. The current interest rate for Term Loan A1 has
been set at LIBOR plus 1.625% and for Term Loan A2 at LIBOR plus 1.75%. On the
closing date of the Amendment, the Borrower utilized part of the proceeds from
Term Loan A1 to repay in full the $475.0 million principal amount outstanding
under its existing Term Loan. Including this repayment, gross debt will increase
by a total of $725.0 million.
In addition, pursuant to the Amendment, the maturity date for the revolving loan
commitments was extended until October 14, 2026, the revolving commitments were
increased to $1,750.0 million and the interest rate margins for the revolving
loans were amended to LIBOR plus a variable margin ranging from 1.125% to 2.375%
that will be determined based on the corporate credit rating of the Borrower or
one of its parent entities. As of October 14, 2021, no revolving loans were
outstanding under the Credit Agreement.
The other material terms of the Credit Agreement remain unchanged.
Certain of the lenders under the Credit Agreement and their affiliates have
engaged in, and may in the future engage in, investment banking and other
commercial dealings in the ordinary course of business with the Borrower or its
affiliates. They have received, or may in the future receive, customary fees and
commissions for these transactions.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 is incorporated by reference to this Item
2.03.
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