| Item 1.01 | Entry into a Material Definitive Agreement. |
On September 13, 2023, Seagate HDD Cayman (“Seagate HDD”), an exempted company with limited liability organized under the laws of the Cayman Islands and a subsidiary of Seagate Technology Holdings plc (the “Company”), issued $1,500.0 million in aggregate principal amount of 3.50% Exchangeable Senior Notes due 2028 (the “Notes”), which includes $200.0 million aggregate principal amount of Notes offered and sold pursuant to the over-allotment option of the Initial Purchasers (as defined below) to purchase additional Notes, which was exercised in full on September 8, 2023. The Notes will mature on June 1, 2028, and were issued pursuant to an indenture, dated as of September 13, 2023 (the “Indenture”), among Seagate HDD, the Company, Seagate Technology Unlimited Company (together with the Company, the “Guarantors”) and Computershare Trust Company, National Association (the “Trustee”), as trustee of the Notes.
The Notes were issued and sold in a private offering in reliance on an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), to the initial purchasers of the Notes (the “Initial Purchasers”) for resale by such Initial Purchasers to persons reasonably believed to be qualified institutional buyers within the United States in accordance with Rule 144A under the Securities Act. The Notes are subject to restrictions on transfer and may only be offered or sold in transactions exempt from or not subject to the registration requirements of the Securities Act and other applicable securities laws.
Prior to March 1, 2028, the Notes are exchangeable at the option of the holders only under certain circumstances as set forth in the Indenture. On or after March 1, 2028, the Notes are exchangeable at any time at the option of the holders until the close of business on the second scheduled trading day immediately preceding the maturity date, unless the Notes have been previously redeemed or repurchased by Seagate HDD. Upon exchange of the Notes, Seagate HDD will pay cash up to the aggregate principal amount of Notes to be exchanged and will pay or cause to be delivered, as the case may be, cash, ordinary shares of the Company or a combination of cash and ordinary shares of the Company, at Seagate HDD’s election, in respect of any remainder of the exchange obligation in excess of such principal amount. The initial exchange rate for the Notes is 12.1253 ordinary shares per $1,000 principal amount of Notes.
The following is a brief description of the material provisions of the Indenture and the Notes. This description of the Indenture and the Notes is qualified in its entirety by the Indenture and the form of 3.50% Exchangeable Senior Note due 2028 (included in the Indenture), filed as Exhibits 4.1 and 4.2, respectively, to this Current Report on Form 8-K, which are incorporated herein by reference.
Interest
Interest on the Notes will be payable in cash on March 1 and September 1 of each year, commencing on March 1, 2024, and upon maturity on June 1, 2028, to holders of record of the Notes on the February 15 and August 15 immediately preceding the interest payment date or, with respect to the interest payable on June 1, 2028, the preceding May 15, 2028, respectively.
Guarantees
The obligations of Seagate HDD pursuant to the Indenture, including any repurchase obligation resulting from a Fundamental Change (as defined in the Indenture), are fully and unconditionally guaranteed, on a senior unsecured basis, by the Guarantors (the “Guarantees”).
Ranking
The Notes are unsecured and will rank equally in right of payment with all of Seagate HDD’s other existing and future senior unsecured indebtedness and senior to any future subordinated indebtedness of Seagate HDD. The Guarantees will rank equally in right of payment with all of the Guarantors’ other existing and future unsecured indebtedness. The Notes will be effectively subordinated to the Guarantors’ and Seagate HDD’s present and future secured debt, to the extent of the value of the assets securing that debt, and will be structurally subordinated to all present and future liabilities, including trade payables, of Seagate HDD’s subsidiaries (including liabilities pursuant to guarantees of Seagate HDD’s credit agreement provided by certain of Seagate HDD’s subsidiaries).
