Published on 4/2/2020 in the Prospect News Investment Grade Daily.
New Issue: VMware prices $2 billion of fixed-rate senior notes in three tranches
By Cristal Cody
Tupelo, Miss., April 2 – VMware, Inc. priced a $2 billion three-part offering of fixed-rate senior notes (Baa2/BBB-/BBB-) on Thursday, according to a market source and an FWP filing with the Securities and Exchange Commission.
A $750 million five-year tranche of 4.5% notes priced at 99.949 to yield 4.51% and a spread of Treasuries plus 412.5 basis points.
The company sold $500 million of 4.65% seven-year notes at 99.951 to yield 4.657%, or a 412.5 bps spread.
Finally, $750 million of 4.7% 10-year notes priced at 99.643 to yield 4.744% and a Treasuries plus 412.5 bps spread.
All three tranches were talked to price at the Treasuries plus 450 bps area.
BofA Securities, Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Barclays, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, UBS Securities LLC and Wells Fargo Securities, LLC were the bookrunners.
Proceeds will be used to redeem $1.25 billion of 2.3% senior notes due August 2020 and for general corporate purposes.
VMware is a Palo Alto, Calif., virtualization solutions provider.
| Issuer: | VMware, Inc.
|
| Amount: | $2 billion
|
| Description: | Senior notes
|
| Bookrunners: | BofA Securities, Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Barclays, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, UBS Securities LLC and Wells Fargo Securities, LLC
|
| Trade date: | April 2
|
| Settlement date: | April 7
|
| Ratings: | Moody’s: Baa2
|
| S&P: BBB-
|
| Fitch: BBB-
|
| Distribution: | SEC registered
|
|
|
| Five-year notes
|
| Amount: | $750 million
|
| Maturity: | May 15, 2025
|
| Coupon: | 4.5%
|
| Price: | 99.949
|
| Yield: | 4.51%
|
| Spread: | Treasuries plus 412.5 bps
|
| Call features: | Make-whole call at price equal to greater of par or Treasuries plus 50 bps before April 15, 2025; thereafter at par
|
| Price guidance: | Treasuries plus 450 bps area
|
|
|
| Seven-year notes
|
| Amount: | $500 million
|
| Maturity: | May 15, 2027
|
| Coupon: | 4.65%
|
| Price: | 99.951
|
| Yield: | 4.657%
|
| Spread: | Treasuries plus 412.5 bps
|
| Call features: | Make-whole call at price equal to greater of par or Treasuries plus 50 bps before March 15, 2027; thereafter at par
|
| Price guidance: | Treasuries plus 450 bps area
|
|
|
| 10-year notes
|
| Amount: | $750 million
|
| Maturity: | May 15, 2030
|
| Coupon: | 4.7%
|
| Price: | 99.643
|
| Yield: | 4.744%
|
| Spread: | Treasuries plus 412.5 bps
|
| Call features: | Make-whole call at price equal to greater of par or Treasuries plus 50 bps before Feb. 15, 2030; thereafter at par
|
| Price guidance: | Treasuries plus 450 bps area
|
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