Item 1.01 Entry into a Material Definitive Agreement.
Issuance of Senior Notes
On December 13, 2021, two wholly-owned subsidiaries of Dell Technologies Inc. (the “Company”), Dell International L.L.C. and EMC Corporation (together, the “Issuers”), closed their previously announced offering (the “Offering”) of $1,000,000,000 aggregate principal amount of the Issuers’ 3.375% Senior Notes due 2041 (the “2041 Notes”) and $1,250,000,000 aggregate principal amount of the Issuers’ 3.450% Senior Notes due 2051 (the “2051 Notes” and, together with the 2041 Notes, the “Notes”). The Offering was made in a private transaction in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), in the United States only to persons reasonably believed to be “qualified institutional buyers,” as that term is defined in Rule 144A under the Securities Act, or outside the United States pursuant to Regulation S under the Securities Act.
The Notes were issued pursuant to a Base Indenture, dated as of December 13, 2021 (the “Base Indenture”), among the Issuers, the Guarantors (as defined below) and The Bank of New York Mellon Trust Company, N.A., as trustee (in such capacity, the “Trustee”), as supplemented, (i) with respect to the 2041 Notes, by the 2041 Notes Supplemental Indenture No. 1 (the “2041 Notes Supplemental Indenture”), dated as of December 13, 2021, among the Issuers, the Guarantors and the Trustee, and (ii) with respect to the 2051 Notes, by the 2051 Notes Supplemental Indenture No. 1 (the “2051 Notes Supplemental Indenture” and, together with the Base Indenture and the 2041 Notes Supplemental Indenture, the “Indenture”), dated as of December 13, 2021, among the Issuers, the Guarantors and the Trustee.
The Notes are senior unsecured obligations of the Issuers and rank equal in right of payment with all of the Issuers’ existing and future senior indebtedness and senior in right of payment to all of the Issuers’ existing and future subordinated indebtedness. The Notes are guaranteed on a joint and several unsecured basis by the Company, Denali Intermediate, Inc. (“Denali Intermediate”) and Dell Inc. (“Dell” and, together with Denali Intermediate and the Company, the “Guarantors”), each a wholly-owned subsidiary of the Company. Such note guarantees rank equal in right of payment with all existing and future senior indebtedness of the Guarantors and senior in right of payment to all future subordinated indebtedness of the Guarantors. The Notes and the note guarantees are structurally subordinated to all of the existing and future indebtedness and other liabilities of any existing and future subsidiaries of the Company that do not guarantee the Notes.
Interest on each series of the Notes begins accruing on December 13, 2021, the issue date of the Notes. Interest on the 2041 Notes accrues at a rate of 3.375% per year, payable semi-annually in arrears on June 15 and December 15 of each year, commencing on June 15, 2022. Interest on the 2051 Notes accrues at a rate of 3.450% per year, payable semi-annually in arrears on June 15 and December 15 of each year, commencing on June 15, 2022. The 2041 Notes mature on December 15, 2041 and the 2051 Notes mature on December 15, 2051.
Prior to (i) June 15, 2041 (the date six months prior to the maturity of the 2041 Notes), in the case of the 2041 Notes, and (ii) on June 15, 2051 (the date six months prior to the maturity of the 2051 Notes), in the case of the 2051 Notes, the Issuers may, on any one or more occasions, redeem some or all of the Notes of such series at a “make-whole” premium, plus accrued and unpaid interest to the redemption date.
On or after (i) June 15, 2041, in the case of the 2041 Notes, and (ii) June 15, 2051, in the case of the 2051 Notes, the Issuers may, on any one or more occasions, redeem some or all of the Notes of such series at a price equal to 100% of the aggregate principal amount of the Notes of such series to be redeemed, plus accrued and unpaid interest to the redemption date.
If a change of control triggering event occurs, the holders of the Notes may require the Issuers to purchase for cash all or a portion of their Notes at a purchase price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest to the repurchase date.
The Indenture contains covenants that impose limitations on, among other things, creating liens on certain assets to secure debt; consolidating, merging, selling or otherwise disposing of all or substantially all assets; and entering into sale and leaseback transactions. The Indenture also contains customary events of default and covenants for an issuer of investment grade debt securities.
