Seagate 2007 Annual Report Download - page 89

Table of Contents
SEAGATE TECHNOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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Continued)
In September 2006, Seagate Technology HDD Holdings (“HDD”), the Company’s wholly-owned direct subsidiary, issued senior notes
totaling $1.5 billion comprised of $300 million aggregate principal amount of Floating Rate Senior Notes due October 2009 (the “2009 Notes”),
$600 million aggregate principal amount of 6.375% Senior Notes due October 2011 (the “2011 Notes”) and $600 million aggregate principal
amount of 6.8% Senior Notes due October 2016 (the “2016 Notes”). These notes are unsecured and rank equally in right of payment with all of
HDD’s other existing and future senior unsecured indebtedness and senior to any present and future subordinated indebtedness of HDD.
$300 Million Aggregate Principal Amount of Floating Rate Senior Notes due October 2009.
The 2009 Notes bear interest at a floating rate
equal to three-month LIBOR plus 0.84% per year, payable quarterly on January 1, April 1, July 1 and October 1 of each year. Interest payments
commenced on January 1, 2007. The 2009 Notes will mature on October 1, 2009. The Company may not redeem the 2009 Notes prior to
maturity.
$600 Million Aggregate Principal Amount of Fixed Rate Senior Notes due October 2011. The 2011 Notes bear interest at the rate of
6.375% per year, payable semi-annually on April 1 and October 1 of each year. The 2011 Notes are redeemable at the option of the Company in
whole or in part, on not less than 30 nor more than 60 days’ notice at a “make-whole” premium redemption price. The “make-whole”
redemption
price will be equal to the greater of (1) 100% of the principal amount of the notes being redeemed, or (2) the sum of the present values of the
remaining scheduled payments of principal and interest on the 2011 Notes being redeemed, discounted at the redemption date on a semi-annual
basis at a rate equal to the sum of the applicable Treasury rate plus 50 basis points.
$600 Million Aggregate Principal Amount of Fixed Rate Senior Notes due October 2016. The 2016 Notes bear interest at the rate of
6.8% per year, payable semi-annually on April 1 and October 1 of each year. The 2016 Notes are redeemable at the option of the Company in
whole or in part, on not less than 30 nor more than 60 days’ notice at a “make-whole” premium redemption price. The “make-whole”
redemption
price will be equal to the greater of (1) 100% of the principal amount of the notes being redeemed, or (2) the sum of the present values of the
remaining scheduled payments of principal and interest on the 2016 Notes being redeemed, discounted at the redemption date on a semi-annual
basis at a rate equal to the sum of the applicable Treasury rate plus 50 basis points.
$135 Million Aggregate Principal Amount of 6.8% Convertible Senior Notes due April 2010 (the “6.8% Notes”). As a result of its
acquisition of Maxtor on May 19, 2006 (see Note 10), the Company assumed the 6.8% Notes. The 6.8% Notes require semi-annual interest
payments payable on April 30 and October 30. The 6.8% Notes are convertible into common shares of Seagate Technology at a conversion rate
of approximately 30.1733 shares per $1,000 principal amount of the notes. Commencing May 5, 2008, the Company may redeem the
6.8% Notes at 100% of their principal amount, plus accrued and unpaid interest, if the closing price of the common shares for 20 trading days
within a period of 30 consecutive trading days ending on the trading day before the date of the mailing of the redemption notice exceeds 130% of
the conversion price on such trading day. If, at any time, substantially all of the common shares are exchanged or acquired for consideration that
does not consist entirely of common shares that are listed on a United States national securities exchange or approved for quotation on the
NASDAQ National Market or similar system, the holders of the notes have the right to require the Company to repurchase all or any portion of
the notes at their face value plus accrued interest.
$326 Million Aggregate Principal Amount of 2.375% Convertible Senior Notes due August 2012 (the “2.375% Notes”). As a result of its
acquisition of Maxtor on May 19, 2006 (see Note 10), the Company assumed the 2.375% Notes. The 2.375% Notes require semi-annual interest
payments payable on February 15 and August 15. The 2.375% Notes are convertible into common shares of Seagate Technology at a conversion
rate of
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