Dell Technologies refinances via new term loans at reduced pricing

By Susanna Moon

Chicago, Oct. 25 – Dell Technologies Inc. refinanced some loans with a $4.45 billion senior secured term loan A-2 facility due Sept. 7, 2021 and a senior secured term loan A-3 facility due Dec. 31, 2018.

As reported, Dell Technologies launched a $4,788,000,000 repricing of its first-lien term loan due Sept. 7, 2023 on Oct. 11.

The new term loans contain substantially the same terms as the original loans except for the following, according to an 8-K filing with the Securities and Exchange Commission:

• The principal amount of the new term A-2 loans is $4.45 billion, which reflects a $672,187,500 increase to the original size;

• Interest on the term A-2 loans will be reduced to Libor plus 125 basis points to 200 bps, based on Dell’s corporate credit rating from S&P and Moody’s; and

• Interest on the term A-3 loans will be lowered to Libor plus 100 bps to 175 bps.

Proceeds from the increase in the new term A-2 loans were used to pay $212,125,000 of the original term A-3 loans and $460,062,500 of the refinancing term B loans, with the remainder to be used for general corporate purposes.

Revolver, more term loans

The company also obtained $3.33 billion of revolving commitments, which reflects a $180 million increase to the previous size, with interest cut to Libor plus 100 basis points to 175 bps and commitment fees ranging from 20 bps to 35 bps.

Also on Friday, the company refinanced the term B loans with a $5 million term loan B due Sept. 7, 2023, or down $460,062,500 from the previous term B loans.

Interest on the term B loans will be Libor plus 200 bps

The amortization payments for the term B loans will be 0.25%, payable at the end of each fiscal quarter beginning Jan. 31, 2018 and any prepayment before six months requires a prepayment premium of 1%.

Background

As previously reported, Denali Intermediate Inc., Dell Inc., Dell International LLC and EMC Corp. entered into a credit agreement dated Sept. 7, 2016 with Credit Suisse AG, Cayman Islands Branch as term loan B administrative agent and as collateral agent, JPMorgan Chase Bank, NA as term loan A and revolver administrative agent and swingline lender.

On March 8, companies refinanced the original term B loans with a $500 million incremental term B loans.

More details

As reported Oct. 11, the repricing of the first-lien term loan due Sept. 7, 2023 had price talk of Libor plus 200 bps to Libor plus 225 bps, down from the existing level of Libor plus 250 bps. The Libor floor will remain at 0.75% and the price is par.

The repricing also reduced the size of the loan from $5.46 billion.

Credit Suisse, JPMorgan, Bank of America Merrill Lynch, Barclays, Citigroup and Goldman Sachs are the arrangers.

Commitments were due by Oct. 17.

Dell Technologies is a Round Rock, Texas-based technology company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.