By Cristal Cody
Chicago, March 31 – Workday Inc. sold $3 billion of senior notes in three tranches (Baa2/BBB) on Wednesday, according to an FWP filing with the Securities and Exchange Commission.
The $1 billion five-year tranche priced with a 3.5% coupon at 99.941 to yield 3.513%. The spread came at 107 basis points over the benchmark Treasury, tighter than spread talk in the 140 bps area.
Until one month before the maturity date, the tranche is callable with a make-whole premium of Treasuries plus 20 bps. After March 1, 2027, the notes are callable at par.
The smallest tranche, the $750 million seven-year notes, priced with a 3.7% coupon at 99.994 to yield 3.701%. The spread priced out at 127 bps over Treasuries compared to talk in the Treasuries plus 160 bps area.
Similarly, the notes can be redeemed with a make-whole premium at Treasuries plus 20 bps until one month before the maturity date when the par call option will start.
The largest part of the offering is $1.25 billion of 3.8% notes, which priced at 99.802 to yield 3.824%. The spread priced at 147 bps over Treasuries, tighter than spread talk in the 180 bps area.
Callable with a make-whole premium of Treasuries plus 25 bps until three months before the maturity date, the notes will be callable at par after Jan. 1, 2032.
BofA Securities, Inc., Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are the joint bookrunning managers for the offering. Passive bookrunners were Truist Securities, Inc., U.S. Bancorp Investments, Inc. and Barclays.
Proceeds will be used for general corporate purposes, which includes repaying $693.8 million outstanding under the company’s senior term loan facility and which may include repaying the $1.15 billion of its 0.25% convertible senior notes due 2022.
The provider of financial management and human capital management software is based in Pleasanton, Calif.
| Issuer: | Workday Inc.
|
| Amount: | $3 billion
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| Issue: | Senior notes
|
| Bookrunners: | BofA Securities, Inc., Morgan Stanley & Co. LLC and Wells Fargo Securities LLC
|
| Passive bookrunners: | Truist Securities, Inc., U.S. Bancorp Investments, Inc. and Barclays
|
| Co-managers: | MUFG, Deutsche Bank Securities Inc., RBC Capital Markets LLC, Loop Capital Markets LLC and Siebert Williams Shank & Co., LLC
|
| Trustee: | U.S. Bank Trust Co., NA
|
| Counsel to issuer: | Fenwick & West LLP
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| Counsel to bookrunners: | Davis Polk & Wardwell LLP
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| Trade date: | March 30
|
| Settlement date: | April 1
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| Ratings: | Moody’s: Baa2
|
| S&P: BBB
|
| Distribution: | SEC registered
|
|
|
| Five-year notes
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| Amount: | $1 billion
|
| Maturity: | April 1, 2027
|
| Coupon: | 3.5%
|
| Price: | 99.941
|
| Yield: | 3.513%
|
| Spread: | Treasuries plus 107 bps
|
| Call: | Make-whole call at Treasuries plus 20 bps until March 1, 2027; thereafter at par
|
| Price talk: | Treasuries plus 140 bps area
|
| Cusip: | 98138HAG6
|
|
|
| Seven-year notes
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| Amount: | $750 million
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| Maturity: | April 1, 2029
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| Coupon: | 3.7%
|
| Price: | 99.994
|
| Yield: | 3.701%
|
| Spread: | Treasuries plus 127 bps
|
| Call: | Make-whole call at Treasuries plus 20 bps until Feb. 1, 2029; thereafter at par
|
| Price talk: | Treasuries plus 160 bps area
|
| Cusip: | 98138HAH4
|
|
|
| 10-year notes
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| Amount: | $1.25 billion
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| Maturity: | April 1, 2032
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| Coupon: | 3.8%
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| Price: | 99.802
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| Yield: | 3.824%
|
| Spread: | Treasuries plus 147 bps
|
| Call: | Make-whole call at Treasuries plus 25 bps until Jan. 1, 2032; thereafter at par
|
| Price talk: | Treasuries plus 180 bps area
|
| Cusip: | 98138HAJ0
|
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