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June 9, 2016

Dell to offload $3.25 billion in junk bonds to further fund EMC buyout

News: The offering is expected to close on or around 22 June 2016.

By CBR Staff Writer

Denali Holding, the parent company of Dell, is offering $3.25bn of senior notes to finance, in part, the acquisition of EMC.

The offering is anticipated to close on or around 22 June 2016, subject to customary closing conditions.

The proceeds of the offering are expected to be deposited in escrow, with such proceeds to be released to finance the consummation of the Dell-EMC merger subject to customary conditions.

After consummation of the Dell-EMC Merger, Denali’s subsidiary Dell International and EMC will assume all of the co-issuers’ obligations under the Notes.

Dell has already sold $20bn of investment-grade secured bonds and $5bn of institutional loans to fund the $67bn EMC takeover.

The European Commission and the US regulators have approved the merger, which is still subject to EMC shareholders approval.

Under the deal, EMC shareholders will receive $24.05 per share in cash in addition to tracking stock linked to a portion of EMC’s economic interest in the VMware business.

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After completion of the transaction, Michael Dell will lead the combined company as chairman and CEO. EMC chairman and CE Joe Tucci will continue to lead the company until the deal closes.

The deal is anticipated to close before Dell’s third quarter ends next month.

The combination of Dell and EMC will create the world’s largest privately-controlled, integrated technology company, which will be a leader in the high-growth areas of the $2 trillion information technology market with complementary product portfolios, sales teams and R&D investment strategies.

It will have strong capabilities in the areas of digital transformation, software-defined data centre, hybrid cloud, convergedinfrastructure, mobile and security.

Dell went private in 2013 to better serve its customers and drive the innovations that will help them achieve their goals.

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