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Today, Dell Technologies Inc. (NYSE:DELL), a $67.9 billion technology giant with annual revenues of $95.6 billion, disclosed a significant debt offering in a recent 8-K filing with the Securities and Exchange Commission (SEC). According to InvestingPro data, the company, which currently maintains a total debt of $25.4 billion, has entered into an agreement with a group of underwriters to issue a total of $4 billion in senior notes.
The offering, dated March 26, 2025, involves the sale of four series of senior notes with varying maturities and interest rates: $1 billion of 4.750% notes due in 2028, $1 billion of 5.000% notes due in 2030, $1 billion of 5.300% notes due in 2032, and $1 billion of 5.500% notes due in 2035. The notes will be sold at prices marginally below their aggregate principal amounts. InvestingPro analysis shows Dell’s current ratio at 0.78, indicating that short-term obligations exceed liquid assets.
Dell Technologies plans to use the net proceeds from this offering for general corporate purposes, which may include debt repayment. The company’s statement indicates that the notes will be unsecured and jointly guaranteed by Dell Technologies, Denali Intermediate Inc., and Dell Inc .
The sale of the notes has been registered with the SEC, and the terms are detailed in the registration statement’s base prospectus, supplemented by prospectus supplements dated March 26, 2025. The closing of the offering is expected on April 1, 2025, subject to customary conditions.
This financial move by Dell Technologies comes at a time when the company is looking to strengthen its balance sheet and ensure financial flexibility for future corporate initiatives. The underwriting agreement was made with a consortium of banks, including BofA Securities, Citigroup (NYSE:C) Global Markets, Goldman Sachs & Co., HSBC Securities (USA), J.P. Morgan Securities, and Wells Fargo (NYSE:WFC) Securities.
Investors and market watchers will be paying close attention to how this capital raise will impact Dell’s financial strategy and its ability to manage debt levels effectively. Trading at a P/E ratio of 14.97, Dell appears undervalued according to InvestingPro Fair Value metrics, with 12 additional ProTips and comprehensive financial analysis available through the Pro Research Report. The information provided in this article is based on a press release statement and InvestingPro data.
In other recent news, Dell Technologies reported a 7% year-over-year revenue increase to $23.9 billion, driven by a 22% jump in its Infrastructure Solutions Group (ISG) revenue. The ISG’s growth was notably influenced by a 37% rise in server and networking revenue, fueled by demand for artificial intelligence (AI) and traditional servers. Dell is also partnering with Apple (NASDAQ:AAPL) and Super Micro Computer (NASDAQ:SMCI), Inc. to supply AI servers, with Apple reportedly investing around $1 billion in servers from these companies. In a separate development, Dell, in collaboration with NVIDIA (NASDAQ:NVDA), expanded its AI infrastructure offerings, introducing new AI solutions like the Dell Pro Max series and PowerEdge servers.
Morgan Stanley (NYSE:MS) maintained an Overweight rating on Dell, citing a significant increase in orders for Dell’s AI server systems, with a price target of $128. Meanwhile, Loop Capital adjusted its outlook on Dell, reducing the price target to $130 but maintaining a Buy rating following Dell’s recent earnings report. UBS also revised its price target for Dell to $150, down from $158, while keeping a Buy rating, noting the company’s substantial backlog and projected AI server revenue growth.
Dell’s initial fiscal year 2026 revenue guidance is set between $101 billion and $105 billion, with an EPS guidance of $9.30, aligning closely with UBS’s estimates. Despite some challenges in the PC market and revenue recognition issues due to a GPU transition, Dell’s strong order backlog and expected growth in AI server shipments are seen as positive indicators for its future performance.
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