Seagate Technology Holdings plc completed a privately negotiated exchange of $500 million of its 3.50% Exchangeable Senior Notes due 2028 on November 4, 2025. The exchange retired the notes and replaced them with a combination of cash and ordinary shares, a transaction that is expected to close around November 10, 2025.
The consideration for the exchange consists of approximately $503.4 million in cash and a number of ordinary shares that will be determined over a one‑day trading period beginning November 5. After the exchange, Seagate will have about $1.0 billion of 3.50% notes outstanding, all of which retain their original terms.
The move is part of Seagate’s ongoing deleveraging strategy. By exchanging the notes, the company eliminates $500 million of principal and the associated 3.50% interest expense, which will lower future interest payments and improve the debt‑to‑equity ratio. The cash outlay of $503.4 million is slightly higher than the principal, a common feature of such exchanges, and the issuance of shares introduces a modest dilution that management expects to be offset by the long‑term savings in interest costs.
Seagate’s balance sheet has already benefited from a $684 million reduction in total debt during fiscal 2025, and the company redeemed its 4.875% Senior Notes due 2027 in June. The current exchange further strengthens the company’s liquidity position and supports its strategy to invest in high‑capacity storage for AI and cloud data‑center customers.
CEO Dave Mosley highlighted the company’s strong financial health and the growing demand for its high‑capacity drives, noting that the exchange is a prudent step to reduce leverage while maintaining the flexibility needed to capitalize on AI‑driven growth.
The transaction reduces Seagate’s interest burden, improves free‑cash‑flow generation, and signals the company’s continued focus on maintaining a healthy capital structure while pursuing growth opportunities in the AI and high‑capacity storage markets.
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