Rackspace Technology Files 8-K on Financial Agreements

Ticker: RXT · Form: 8-K · Filed: Mar 12, 2024 · CIK: 1810019

Rackspace Technology, Inc. 8-K Filing Summary
FieldDetail
CompanyRackspace Technology, Inc. (RXT)
Form Type8-K
Filed DateMar 12, 2024
Risk Levelmedium
Pages16
Reading Time19 min
Key Dollar Amounts$0.01, $331.4 million, $1,588.8 million, $267.3 million, $1,312.0 million
Sentimentneutral

Sentiment: neutral

Topics: material-agreement, financial-condition, regulation-fd

Related Tickers: RXT

TL;DR

Rackspace Tech filed an 8-K detailing new financial deals and results.

AI Summary

On March 7, 2024, Rackspace Technology, Inc. entered into a Material Definitive Agreement related to its financial obligations. The company also disclosed its results of operations and financial condition, and provided a Regulation FD disclosure. This filing is a current report under the Securities Exchange Act of 1934.

Why It Matters

This filing provides crucial updates on Rackspace Technology's financial standing and material agreements, which could impact investor confidence and stock performance.

Risk Assessment

Risk Level: medium — Filings related to material definitive agreements and financial condition can introduce uncertainty and affect stock price.

Key Players & Entities

  • Rackspace Technology, Inc. (company) — Registrant
  • March 7, 2024 (date) — Date of earliest event reported
  • Securities Exchange Act of 1934 (legal_document) — Governing Act for filing

FAQ

What is the primary purpose of this 8-K filing for Rackspace Technology, Inc.?

The primary purpose is to report on the entry into a Material Definitive Agreement, results of operations and financial condition, creation of a direct financial obligation, and Regulation FD disclosure.

What is the date of the earliest event reported in this filing?

The date of the earliest event reported is March 7, 2024.

Under which section of the Securities Exchange Act is this report filed?

This report is filed pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934.

What are the key items of information included in this 8-K filing?

The key items include Entry into a Material Definitive Agreement, Results of Operations and Financial Condition, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement, and Regulation FD Disclosure.

What is the principal executive office address for Rackspace Technology, Inc.?

The address of the principal executive offices is 19122 US Highway 281N, Suite 128, San Antonio, Texas 78258.

Filing Stats: 4,667 words · 19 min read · ~16 pages · Grade level 13.7 · Accepted 2024-03-12 16:17:15

Key Financial Figures

  • $0.01 — ch registered Common stock, par value $0.01 per share RXT The Nasdaq Stock Market L
  • $331.4 million — Pursuant to the Private Exchange, (i) $331.4 million aggregate principal amount of Existing
  • $1,588.8 million — al amount of Existing Secured Notes and $1,588.8 million aggregate principal amount of Existing
  • $267.3 million — or purchased for cancellation and (ii) $267.3 million aggregate principal amount of new first
  • $1,312.0 million — ue 2028 (the " New Secured Notes ") and $1,312.0 million aggregate principal amount of new first
  • $375.0 million — hange, the Company eliminated more than $375.0 million of its debt and extended the maturity o
  • $1,579.4 million — f its debt and extended the maturity of $1,579.4 million of its debt until May 2028. In addition
  • $275.0 million — 8. In addition, the New Borrower issued $275.0 million in aggregate principal amount of first
  • $69.3 million — d the Company repurchased and cancelled $69.3 million aggregate principal amount of its 5.375
  • $182.3 million — e 2028. With respect to the remaining $182.3 million aggregate principal amount of the outst
  • $592.3 million — outstanding Existing Secured Notes and $592.3 million aggregate principal amount of the Exist
  • $25 million — der the revolving credit facility up to $25 million and letters of credit that are cash col
  • $774.7 million — Exchanges, the Company expects that (i) $774.7 million aggregate principal amount of Existing
  • $127.6 million — or purchased for cancellation and (ii) $127.6 million aggregate principal amount of New Secur
  • $418.8 million — incipal amount of New Secured Notes and $418.8 million aggregate principal amount of New FLSO

Filing Documents

01. Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement. On March 12, 2024, Rackspace Technology, Inc. (together with its subsidiaries, the " Company ") closed a private debt exchange (the " Private Exchange ") with (i) holders (the " Participating Holders ") of the existing 3.50% First-Priority Senior Secured Notes due 2028 (the " Existing Secured Notes ") issued by Rackspace Technology Global, Inc., a wholly owned subsidiary of the Company (the " Existing Borrower "), representing more than 64% of the aggregate principal amount of the outstanding Existing Secured Notes, and (ii) lenders (the " Participating Lenders " and, together with the Participating Holders, the " Participating Secured Parties ") representing more than 72% of the aggregate principal amount of the outstanding term loans (the " Existing Term Loans ") under the Company's First Lien Credit Agreement, originally dated November 3, 2016 (as amended, the " Existing Credit Agreement "). Pursuant to the Private Exchange, (i) $331.4 million aggregate principal amount of Existing Secured Notes and $1,588.8 million aggregate principal amount of Existing Term Loans were exchanged or purchased for cancellation and (ii) $267.3 million aggregate principal amount of new first lien second out secured notes due 2028 (the " New Secured Notes ") and $1,312.0 million aggregate principal amount of new first lien second out term loans (the " New FLSO Term Loans ") were issued by Rackspace Finance, LLC, a new subsidiary of the Company (the " New Borrower "). As a result of the Private Exchange, the Company eliminated more than $375.0 million of its debt and extended the maturity of $1,579.4 million of its debt until May 2028. In addition, the New Borrower issued $275.0 million in aggregate principal amount of first lien first out senior secured term loans (the " New FLFO Term Loans ") and the Company repurchased and cancelled $69.3 million aggregate principal amount of its 5.375% Senior Notes due 2028. With respe

02. Results of Operations and Financial Condition

Item 2.02. Results of Operations and Financial Condition. On March 12, 2024, the Company issued a press release announcing its financial results for the fiscal quarter and year ended December 31, 2023. A copy of the press release is furnished herewith as Exhibit 99.1 and incorporated by reference herein. The information contained in this Item 2.02, including Exhibit 99.1 attached hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the " Exchange Act "), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filings, unless expressly incorporated by specific reference in such filing. Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

01. Regulation FD Disclosure

Item 7.01. Regulation FD Disclosure. Closing of Private Exchange On March 12, 2024, the Company issued a press release announcing the closing of the Private Exchange. A copy of the press release is furnished herewith as Exhibit 99.2 and incorporated by reference herein. Anticipated Public Exchanges Shortly following the date hereof, the Company expects to commence an offer to all of the holders of the Existing Borrower's remaining Existing Term Loans (the " Public Term Loan Exchange ") and to all of the holders of the Existing -6- Borrower's remaining Existing Secured Notes (the " Public Note Exchange " and, together with the Public Term Loan Exchange, the " Public Exchanges "). Assuming full participation in the Public Exchanges, the Company expects that (i) $774.7 million aggregate principal amount of Existing Secured Notes and Existing Term Loans would be exchanged or purchased for cancellation and (ii) $127.6 million aggregate principal amount of New Secured Notes and $418.8 million aggregate principal amount of New FLSO Term Loans would be issued by the New Borrower. The Public Exchanges, if launched, will be subject to certain customary closing conditions and termination provisions and may not be consummated on the terms described herein or at all. This report is for informational purposes only and shall not constitute or form part of any offer or invitation to purchase or sell, or any solicitation of any offer to sell or purchase, notes or any other securities or debt instruments, and neither this report nor any part of it, nor the fact of its release, shall form the basis of, or be relied on or in connection with, any contract therefor. The Public Note Exchange will be made only by and pursuant to the terms and conditions of a confidential offering memorandum that will only be made available to eligible holders of the Existing Secured Notes. The complete terms and conditions of the Public Note Exchange for the Existing Secured Notes will be se

Forward-Looking Statements

Forward-Looking Statements The Company has made statements in this report that are forward-looking and therefore subject to risks and uncertainties. All statements, other than statements of historical fact, included in this report are, or could be, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are made in reliance on the safe harbor protections provided thereunder. These forward-looking statements include statements related to the Private Exchange and the Public Exchanges, among other things. The Public Exchanges will be subject to customary closing conditions. Any forward-looking statement made in this report speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. Forward-looking statements can be identified by various words such as "expects," "intends," "will," "anticipates," "believes," "confident," "continue," "propose," "seeks," "could," "may," "should," "estimates," "forecasts," "might," "goals," "objectives," "targets," "planned," "projects," and similar expressions. These forward-looking statements are based on management's current beliefs and assumptions and on information currently available to management. The Company cautions that these statements are subject to risks and uncertainties, many of which are outside of its control, and could cause future events or results to be materially different from those stated or implied in this report, including among others, risk factors that are described in the Company's Annual Reports on Form 10-K, Quarterly Reports -7- on Form 10-Q, Current Reports on Form 8-K, and other filings with the Securities and Exchange Commission, including the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained therein.

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. (d) Exhibits. Exhibit No . Description 4.1 Indenture, dated March 12, 2024, among Rackspace Finance, LLC, the guarantors party thereto from time to time and Computershare Trust Company, N.A., as trustee 10.1 First Lien Credit Agreement, dated March 12, 2024, among Rackspace Finance Holdings, LLC, Rackspace Finance, LLC, the lenders and issuing banks party thereto and Citibank, N.A., as administrative agent and Citibank, N. A., acting through its agency & trust business, as collateral agent 10.2 Incremental Assumption and Amendment Agreement No. 1, dated March 12, 2024, among Rackspace Finance Holdings, LLC, Rackspace Finance, LLC, the subsidiary loan parties party thereto, the lenders party thereto and Citibank, N.A., as administrative agent 99.1 Press Release dated March 12, 2024, regarding financial results for the fiscal year ended December 31, 2023 99.2 Press Release dated March 12, 2024, regarding closing of the Private Exchange 99.3 Discussion Materials 104 Cover Page Interactive Data File (formatted as Inline XBRL) -8-

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. RACKSPACE TECHNOLOGY, INC. Date: March 12, 2024 By: /s/ Mark Marino Mark Marino Chief Financial Officer -9-

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