NetApp Prices $1.25 Billion of Senior Notes

Rhea-AI Summary

NetApp (NASDAQ: NTAP) has announced the pricing of senior notes totaling $1.25 billion, split into two offerings: $625 million of 5.50% Senior Notes due 2032 and $625 million of 5.70% Senior Notes due 2035. The offering is expected to close on March 17, 2025.

The company plans to use part of the proceeds to repay its existing $750 million of 1.875% Senior Notes due 2025 at maturity, with the remainder allocated for general corporate purposes. The offering is being managed by a consortium of financial institutions including Goldman Sachs & Co. , J.P. Morgan, BofA Securities, Wells Fargo Securities, Citigroup, and MUFG as joint book-running managers.

Positive

• Successful pricing of $1.25 billion in senior notes indicates strong market confidence
• Higher interest rates on new notes (5.50% and 5.70%) replaced by lower-rate debt (1.875%)
• Extended debt maturity profile to 2032 and 2035 improves long-term financial flexibility

Negative

• Higher interest expense due to increased rates on new notes compared to retiring debt
• Substantial debt commitment of $1.25 billion increases company's leverage

Insights

Financial Analyst

NetApp's pricing of $1.25 billion in senior notes represents a significant debt restructuring with mixed financial implications. The company is issuing two tranches of debt - $625 million at 5.50% due 2032 and $625 million at 5.70% due 2035 - primarily to refinance its maturing $750 million of 1.875% notes due in 2025.

This transaction reveals several key financial considerations. First, NetApp is substantially increasing its interest expenses as it replaces lower-rate debt (1.875%) with higher-rate debt (5.50% and 5.70%), reflecting the current higher interest rate environment. This will increase annual interest expenses by approximately $29 million.

Second, the company is raising $500 million more than needed for the refinancing, providing additional liquidity for "general corporate purposes." This extra capital gives NetApp financial flexibility for potential investments, share repurchases, or operational needs.

Third, by extending maturities to 2032 and 2035, NetApp is securing long-term financing that eliminates near-term refinancing risk, creating greater stability in its capital structure.

The transaction appears to be a prudent capital management move despite the higher interest rates. NetApp is locking in fixed-rate debt for an extended period while expanding its financial resources, which maintains its strategic flexibility in a competitive data infrastructure market.

SAN JOSE, Calif.--(BUSINESS WIRE)-- NetApp® (NASDAQ: NTAP), the intelligent data infrastructure company, today announced the pricing of $625 million in aggregate principal amount of its 5.50% Senior Notes due 2032 that will bear interest at 5.50% per annum and $625 million in aggregate principal amount of its 5.70% Senior Notes due 2035 that will bear interest at 5.70% per annum. The offering is expected to close, subject to the satisfaction of customary closing conditions, on March 17, 2025.

NetApp intends to use a portion of the net proceeds of this offering to repay its $750 million outstanding principal amount of 1.875% Senior Notes due 2025 at maturity and the remainder of the net proceeds for general corporate purposes.

Goldman Sachs & Co. LLC, J.P. Morgan, BofA Securities, Wells Fargo Securities, Citigroup, and MUFG are acting as joint book-running managers.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the senior notes or any other securities nor shall there be any sale of the senior notes or any other securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The offering of senior notes may be made only by means of a preliminary prospectus supplement and the accompanying prospectus, copies of which can be obtained from:

Goldman Sachs & Co. LLC
200 West Street
New York, NY 10282
Attention: Prospectus Department
Tel: (866) 471-2526
Fax: (212) 902-9316
Email: prospectus-ny@ny.email.gs.com

J.P. Morgan Securities LLC
383 Madison Ave.
New York, NY 10179
Attention: Investment Grade Syndicate Desk, 3rd Floor
Tel: (212) 834-4533
Fax: (212) 834-6081

BofA Securities, Inc.
NC1-022-02-25,
201 North Tryon Street
Charlotte, NC 28255-0001
Attn: Prospectus Department
Tel: 1-800-294-1322
Email: dg.prospectus_requests@bofa.com

Wells Fargo Securities, LLC
608 2nd Avenue South, Suite 1000
Minneapolis, MN 55402
Attention: WFS Customer Service
Tel: 1-800-645-3751
Email: wfscustomerservice@wellsfargo.com

Citigroup Global Markets Inc.
c/o Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, NY 11717
Telephone: 1-800-831-9146
Email: prospectus@citi.com

MUFG Securities Americas Inc.
1221 Avenue of the Americas, 6th Floor
New York, NY 10020
Attn: Capital Markets Group
Phone: 877-649-6848

Cautionary Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially, including, but not limited to, whether NetApp will consummate the offering, prevailing market conditions, the anticipated use of the proceeds of the offering, which could change as a result of market conditions or for other reasons, interest rates and corporate considerations and the impact of general economic, industry or political conditions in the United States or internationally. We disclaim any obligation to update information contained in this press release whether as a result of new information, future events, or otherwise.

About NetApp

NetApp is the intelligent data infrastructure company, combining unified data storage, integrated data services, and CloudOps solutions to turn a world of disruption into an opportunity for every customer. NetApp creates silo-free infrastructure, harnessing observability and AI to enable the industry’s best data management. As the only enterprise-grade storage service natively embedded in the world’s biggest clouds, our data storage delivers seamless flexibility. In addition, our data services create a data advantage through superior cyber resilience, governance, and application agility. Our CloudOps solutions provide continuous optimization of performance and efficiency through observability and AI. No matter the data type, workload, or environment, with NetApp you can transform your data infrastructure to realize your business possibilities.

NETAPP, the NETAPP logo, and the marks listed at www.netapp.com/TM are trademarks of NetApp, Inc. Other company and product names may be trademarks of their respective owners.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250312744804/en/

Media Contact

Kenya Hayes

NetApp

kenya.hayes@netapp.com



Investor Contact

Kris Newton

NetApp

kris.newton@netapp.com

Source: NetApp

FAQ

What is the total value and structure of NetApp's (NTAP) new senior notes offering?

NetApp is offering $1.25 billion in senior notes, divided into two $625 million tranches: one at 5.50% due 2032 and another at 5.70% due 2035.

When will NetApp's (NTAP) new senior notes offering close?

The senior notes offering is expected to close on March 17, 2025, subject to customary closing conditions.

How will NetApp (NTAP) use the proceeds from the senior notes?

NetApp will use part of the proceeds to repay $750 million in 1.875% Senior Notes due 2025, with the remaining funds for general corporate purposes.

What are the interest rates for NetApp's (NTAP) new senior notes?

The 2032 notes will bear interest at 5.50% per annum, while the 2035 notes will bear interest at 5.70% per annum.