© Reuters.
SAN ANTONIO – Rackspace Technology (NASDAQ: NASDAQ:), a provider of hybrid, multicloud, and AI solutions, has successfully completed a private debt exchange with a group of its creditors. This transaction has allowed the company to cut over $375 million of its net debt. Moreover, Rackspace has secured $275 million in new capital to bolster its strategic initiatives.
The private debt exchange involved creditors holding a majority of the company’s first lien term loans and notes, as well as all of its Revolving Credit Facility commitments. The maturities of these debts have been extended to May 2028.
Rackspace also announced plans to launch a public debt exchange offer to all remaining lenders and first lien noteholders. This offer is expected to further reduce the company’s net debt by over $600 million and decrease annual interest expenses by around $13 million.
If the public exchange offer is fully subscribed, Rackspace will have raised a total of $575 million in new capital over the past year, slashing its net financial debt by over $900 million and cutting its net annual interest expense by approximately $40 million.
The company’s CEO, Amar Maletira, expressed that the transactions significantly strengthen Rackspace’s financial position and support its commitment to delivering value through its technology solutions. He also acknowledged the confidence of their financial partners in the company’s momentum over the last year.
These financial maneuvers will not affect Rackspace’s equity ownership. The company’s advisors included Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel, PJT Partners (NYSE:) LP as investment banker, and C Street Advisory Group as strategic communications advisor.
This press release clarifies that the information provided is for informational purposes only and does not represent an offer to sell or purchase securities. The public exchange offer will only be made to eligible holders of the company’s existing first lien notes and will be subject to customary closing conditions.
This news is based on a press release statement from Rackspace Technology.
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