Published on 8/17/2017 in the Prospect News Investment Grade Daily.
New Issue: VMware prices $4 billion of notes due 2020, 2022, 2027
By Devika Patel
Knoxville, Tenn., Aug. 17 – VMware, Inc. priced a combined $4 billion of senior notes (Baa2/BBB-/BBB-) in three tranches late Wednesday, according to an FWP filed with the Securities and Exchange Commission.
The company priced $1.25 billion of 2.3% three-year notes at a spread of 85 basis points over Treasuries. These notes were priced at 99.87 to yield 2.345%.
A $1.5 billion tranche of 2.95% five-year notes priced with a Treasuries plus 120 bps spread. These notes were priced at 99.792 to yield 2.995%.
VMware sold $1.25 billion of 3.9% 10-year notes at 170 bps over Treasuries. These notes were priced at 99.664 to yield 3.941%.
BofA Merrill Lynch and J.P. Morgan Securities LLC were the active bookrunners. Barclays, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., Morgan Stanley & Co. LLC, RBC Capital Markets Corp., UBS Securities LLC, Deutsche Bank Securities Inc. and Wells Fargo Securities LLC were the passive bookrunners.
Proceeds will be used to fund a $1 billion share repurchase program through Aug. 31, 2018, to repay in full two promissory notes with a combined principal of $1.23 billion and for general corporate purposes.
VMware is a Palo Alto, Calif., virtualization solutions provider.
| Issuer: | VMware, Inc.
|
| Amount: | $4 billion
|
| Description: | Senior notes
|
| Bookrunners: | BofA Merrill Lynch and J.P. Morgan Securities LLC (active), Barclays, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., Morgan Stanley & Co. LLC, RBC Capital Markets Corp., UBS Securities LLC, Deutsche Bank Securities Inc. and Wells Fargo Securities LLC (passive)
|
| Trade date: | Aug. 16
|
| Settlement date: | Aug. 21
|
| Ratings: | Moody’s: Baa2
|
| S&P: BBB-
|
| Fitch: BBB-
|
| Distribution: | SEC registered
|
|
|
| Three-year notes
|
| Amount: | $1.25 billion
|
| Maturity: | Aug. 21, 2020
|
| Coupon: | 2.3%
|
| Price: | 99.87
|
| Yield: | 2.345%
|
| Spread: | Treasuries plus 85 bps
|
| Call feature: | Make-whole call at Treasuries plus 12.5 bps
|
|
|
| Five-year notes
|
| Amount: | $1.5 billion
|
| Maturity: | Aug. 21, 2022
|
| Coupon: | 2.95%
|
| Price: | 99.792
|
| Yield: | 2.995%
|
| Spread: | Treasuries plus 120 bps
|
| Call feature: | Make-whole call at Treasuries plus 20 bps until July 21, 2022, then a par call
|
|
|
| 10-year notes
|
| Amount: | $1.25 billion
|
| Maturity: | Aug. 21, 2027
|
| Coupon: | 3.9%
|
| Price: | 99.664
|
| Yield: | 3.941%
|
| Spread: | Treasuries plus 170 bps
|
| Call feature: | Make-whole call at Treasuries plus 25 bps until May 21, 2027, then a par call
|
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