Item 1.01 Entry into a Material Definitive Agreement.
On March 30, 2022, Workday, Inc. ("Workday") entered into an Underwriting
Agreement (the "Underwriting Agreement") with BofA Securities, Inc., Morgan
Stanley & Co. LLC and Wells Fargo Securities, LLC, as representatives of the
underwriters named therein. The Underwriting Agreement provides for the issuance
and sale by Workday of $3.0 billion aggregate principal amount of senior notes,
consisting of $1.0 billion aggregate principal amount of 3.500% notes due 2027
(the "2027 Notes"), $750.0 million aggregate principal amount of 3.700% notes
due 2029 (the "2029 Notes"), and $1.25 billion aggregate principal amount of
3.800% notes due 2032 (the "2032 Notes," and together with the 2027 Notes and
the 2029 Notes, the "Notes"), in an underwritten public offering (the
"Offering").
The Underwriting Agreement contains customary representations, warranties and
covenants. These representations, warranties and covenants are not
representations of factual information to investors about Workday or its
subsidiaries, and the sale of any Notes pursuant to the Underwriting Agreement
is not a representation that there has not been any change in the condition of
Workday. The foregoing description of the terms of the Underwriting Agreement is
not complete and is subject to, and qualified in its entirety by reference to,
the complete terms and conditions of the Underwriting Agreement, which is filed
as Exhibit 1.1 and is incorporated by reference herein.
On April 1, 2022, Workday, Inc. ("Workday") completed its issuance and sale of
the Notes pursuant to the Underwriting Agreement and an Indenture dated as of
April 1, 2022 (the "Base Indenture"), between Workday and U.S. Bank Trust
Company National Association, as trustee, together with an officer's
certificate, dated April 1, 2022 (the "Officer's Certificate," and, together
with the Base Indenture, the "Indenture"). The Notes were issued and sold
pursuant to Workday's effective shelf registration statement on Form S-3
(Registration No. 333-239056) filed with the Securities and Exchange Commission
on June 10, 2020, and a related preliminary prospectus supplement, dated March
30, 2022 and a final prospectus supplement, dated March 30, 2022.
Workday estimates that the net proceeds from the Offering will be approximately
$2.98 billion, after deducting the underwriting discounts and estimated offering
expenses payable by Workday. Workday intends to use the net proceeds from the
sale of the Notes for general corporate purposes, which includes repaying an
aggregate principal amount of $693.8 million outstanding under its existing
senior unsecured term loan facility, and which may include repaying the $1.15
billion outstanding balance of its 0.25% convertible senior notes due 2022
maturing on October 1, 2022. General corporate purposes may also include
additions to working capital, financing of capital expenditures, and future
acquisitions and strategic investment opportunities. Pending other uses, Workday
intends to invest the net proceeds to Workday in investment-grade,
interest-bearing securities such as money market funds, certificates of deposit,
corporate debt, direct or guaranteed obligations of the U.S. government, or term
deposits, or hold as cash. Workday may temporarily invest funds that are not
immediately needed for these purposes in short-term investments, including cash,
cash equivalents or marketable securities, or use funds to reduce outstanding
short-term borrowings.
The Notes are senior unsecured obligations of Workday and rank equally with all
existing and future unsecured and unsubordinated indebtedness of Workday. The
2027 Notes will mature on April 1, 2027 and bear interest at a fixed rate of
3.500% per annum, payable semi-annually in arrears on April 1 and October 1 of
each year, commencing on October 1, 2022. The 2029 Notes will mature on April 1,
2029 and bear interest at a fixed rate of 3.700% per annum, payable
semi-annually in arrears on April 1 and October 1 of each year, commencing on
October 1, 2022. The 2032 Notes will mature on April 1, 2032 and bear interest
at a fixed rate of 3.800% per annum, payable semi-annually in arrears on April 1
and October 1 of each year, commencing on October 1, 2022. The Notes are
redeemable at the option of Workday, at any time in whole or from time to time
in part, at the applicable dates of redemption and applicable redemption prices
specified in the forms of Note included in Exhibits 4.3, 4.4 and 4.5 hereto
(together, the "Forms of Note").
In addition, if a Change of Control Triggering Event (as defined in the Forms of
Note) occurs with respect to the Notes, Workday will be required, subject to
certain exceptions, to make an offer to purchase all or any part of the Notes at
a purchase price in cash equal to 101% of the aggregate principal amount of the
Notes to be purchased, plus accrued and unpaid interest, if any, on such Notes
to, but excluding, the repurchase date. The Indenture also contains certain
other covenants (including certain limited covenants restricting Workday's
ability to incur certain liens and enter into certain sale and leaseback
transactions), events of default and other customary provisions.
The foregoing description of the terms of the Notes is not complete and is
subject to, and qualified in its entirety by reference to, the complete terms
and conditions of the Base Indenture and the Officer's Certificate (including
the Forms of Note included therein), which are filed as Exhibits 4.1, 4.2, 4.3,
4.4 and 4.5 hereto, respectively, and are incorporated by reference herein. In
connection with the issuance of the Notes, Fenwick & West LLP provided Workday
with the legal opinion and consent attached hereto as Exhibit 5.1 and Exhibit
23.1, respectively.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Exhibit Description
1.1 Underwriting Agreement, dated as of March 30, 2022, by and among
Workday and BofA Securities, Inc., Morgan Stanley & Co. LLC and Wells
Fargo Securities, LLC.
4.1 Indenture, dated as of April 1, 2022, between Workday and U.S. Bank
Trust Company National Association, as trustee.
4.2 Officer's Certificate pursuant to the Indenture, dated as of April
1, 2022.
4.3 Form of 3.500% Note due 2027 (included in Exhibit 4.2).
4.4 Form of 3.700% Note due 2029 (included in Exhibit 4.2).
4.5 Form of 3.800% Note due 2032 (included in Exhibit 4.2).
5.1 Opinion of Fenwick & West LLP relating to the Notes.
23.1 Consent of Fenwick & West LLP (included in Exhibit 5.1).
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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