Workday Prices $2.5B Four-Tranche Senior Notes Sale to Retire 2029 Debt
WDAY sits 84% above its 52-week low of $110.36.
Summary
Workday priced a four-part senior notes offering: $750M of 5.700% notes due 2029, $500M of 6.00% notes due 2031, $750M of 6.300% notes due 2033 and $500M of 6.500% notes due 2036. That is $2.5B of new debt, following the 424B5 filed October 21 launching the deal, with Morgan Stanley, BofA Securities, Barclays and Wells Fargo Securities acting as joint book-running managers. Proceeds are earmarked to retire the company's $1.0 billion of 3.500% notes, so this is largely a refinancing that extends maturities and adds roughly $1.5B of gross new leverage. Coupons of 5.7% to 6.5% are a meaningful step up from the 3.500% being retired, raising ongoing interest expense. The size is material but not surprising given the shelf filing, and the stock reaction should be limited unless the market reads the added leverage as a constraint on the buyback or the Silver Lake take-private speculation.
At the time of this announcement, WDAY was trading at $202.89 on NASDAQ in the Technology sector, with a market capitalization of approximately $48.9B. The 52-week trading range was $110.36 to $247.40. This news item was assessed with neutral market sentiment and an importance score of 7 out of 10. Source: Dow Jones Newswires.