Rackspace Technology Announces Pricing of $550 Million Notes Offering by Rackspace Technology Global

Rhea-AI Summary

Rackspace Technology (NASDAQ: RXT) announced a pricing of $550 million in 3.50% First-Priority Senior Secured Notes due 2028, with an issue price of 100.000%. The offering is set to close on February 9, 2021, pending standard conditions. The net proceeds will be allocated to repay existing term loans, cover related fees, and support general corporate activities. The Notes are targeted at qualified institutional buyers and are not registered under the Securities Act. This announcement highlights Rackspace's ongoing financial strategies and commitment to managing its debt effectively.

Positive

• Issuance of $550 million in secured notes improves liquidity.
• Proceeds will help refinance existing debt, potentially lowering interest costs.

Negative

• Dependence on debt financing could pose risks if market conditions worsen.

SAN ANTONIO, Feb. 02, 2021 (GLOBE NEWSWIRE) -- Rackspace Technology™ (NASDAQ: RXT) today announced that its wholly owned subsidiary Rackspace Technology Global, Inc. (the “Company”) has priced its offering of $550.0 million aggregate principal amount of 3.50% First-Priority Senior Secured Notes due 2028 (the "Notes") at an issue price of 100.000%. The closing of the offering is expected to occur on February 9, 2021 and is subject to customary closing conditions.

The Company intends to use the net proceeds from the offering, together with borrowings under a new senior secured first lien term loan facility, to repay the borrowings outstanding under its existing term loan facility, to pay related fees and expenses and for general corporate purposes.

The Notes are being offered only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and outside the United States, only to non-U.S. investors pursuant to Regulation S under the Securities Act. The Notes will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful.

About Rackspace Technology

Rackspace Technology is a leading end-to-end multicloud technology services company. We can design, build and operate our customers’ cloud environments across all major technology platforms, irrespective of technology stack or deployment model. We partner with our customers at every stage of their cloud journey, enabling them to modernize applications, build new products and adopt innovative technologies.

Rackspace Technology Safe Harbor Statement:

Some of the statements in this news release constitute “forward-looking statements” that do not directly or exclusively relate to historical facts. The forward-looking statements made in this release reflect the Company’s intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside of the Company’s control. Known risks include, among others, the risks included in Rackspace Technology, Inc.’s filings with the U.S. Securities and Exchange Commission. Because actual results could differ materially from the Company’s intentions, plans, expectations, assumptions and beliefs about the future, you are urged to view all forward-looking statements contained in this press release with caution. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

IR Contact
Investor Relations
IR@rackspace.com

PR Contact
Natalie Silva
Rackspace Technology Corporate Communications
publicrelations@rackspace.com

FAQ

What is the amount of the newly issued secured notes by RXT?

Rackspace Technology has priced its offering at $550 million.

When is the closing date for the secured notes offering?

The closing is expected to occur on February 9, 2021.

What will the proceeds from the secured notes be used for?

The proceeds will be used to repay existing term loans and for general corporate purposes.

Are the new notes registered under the Securities Act?

No, the notes will not be registered under the Securities Act.