Rackspace Tech Exchanges 4.50% Notes for New 8.25% Notes

TL;DR

Rackspace is swapping old debt for new, higher-interest debt to fix its balance sheet.

AI Summary

Rackspace Technology, Inc. announced on March 13, 2024, that it has entered into a Note Exchange Agreement. This agreement allows holders of its 4.50% Senior Notes due 2029 to exchange them for new 8.25% Senior Secured Notes due 2029. The company is offering $500 million aggregate principal amount of the new notes.

Why It Matters

This exchange aims to improve Rackspace's capital structure by extending debt maturities and potentially reducing interest expense over the long term, impacting its financial flexibility.

Risk Assessment

Risk Level: medium — The exchange involves higher interest rates, which could increase future interest expenses if not managed effectively, and the success of the exchange depends on noteholder participation.

Key Numbers

• 4.50% — Existing Note Interest Rate (Rate on the notes being exchanged)
• 8.25% — New Note Interest Rate (Rate on the new notes being issued)
• $500 million — New Notes Principal Amount (Total amount of new debt being offered)

Key Players & Entities

• Rackspace Technology, Inc. (company) — Registrant
• 4.50% Senior Notes due 2029 (dollar_amount) — Existing debt instrument
• 8.25% Senior Secured Notes due 2029 (dollar_amount) — New debt instrument
• $500 million (dollar_amount) — Aggregate principal amount of new notes
• March 13, 2024 (date) — Date of report and earliest event

FAQ

Key Financial Figures

• $0.01 — ch registered Common stock, par value $0.01 per share RXT The Nasdaq Stock Market L
• $592.3 million — Term Loan Exchange, we expect that (i) $592.3 million aggregate principal amount of the term
• $418.8 million — or purchased for cancellation and (ii) $418.8 million aggregate principal amount of new first

Filing Documents

• rxt-20240313.htm (8-K) — 28KB
• 0001810019-24-000032.txt ( ) — 153KB
• rxt-20240313.xsd (EX-101.SCH) — 2KB
• rxt-20240313_lab.xml (EX-101.LAB) — 22KB
• rxt-20240313_pre.xml (EX-101.PRE) — 13KB
• rxt-20240313_htm.xml (XML) — 3KB

01. Regulation FD Disclosure

Item 7.01. Regulation FD Disclosure. On March 13, 2024, Rackspace Technology, Inc. (the "Company") commenced an offer (the "Public Term Loan Exchange") to all term lenders under the first lien credit agreement, dated as of November 3, 2016 (as amended from time to time, the "Existing Credit Agreement") of its indirect subsidiary Rackspace Technology Global, Inc. (the "Existing Borrower"). Assuming full participation in the Public Term Loan Exchange, we expect that (i) $592.3 million aggregate principal amount of the term loans under the Existing Credit Agreement (the "Existing Term Loans") would be exchanged or purchased for cancellation and (ii) $418.8 million aggregate principal amount of new first lien second out term loans would be issued by Rackspace Finance, LLC (the "New Borrower"). The Public Term Loan Exchange is open to all of the Company's term lenders under the Existing Credit Agreement. The Company expects to launch an exchange offer (the "Public Note Exchange") to eligible holders to exchange the 3.50% First-Priority Senior Secured Notes due 2028 (the "Existing Secured Notes") issued by the Existing Borrower for 3.50% FLSO Senior Secured Notes due 2028 issued by the New Borrower on substantially the same terms as the Public Term Loan Exchange. The information in this Current Report on Form 8-K is being "furnished" pursuant to Item 7.01 and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any Company filing, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such filing and regardless of any general incorporation language in such filing. 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 a

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 Public Term Loan Exchange and the Public Note Exchange, among other things. The Public Term Loan Exchange and the Public Note Exchange are 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 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 Op

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 13, 2024 By: /s/ Sarah Alexander Sarah Alexander Vice President, Deputy General Counsel & Assistant Secretary -3-

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View this 8-K filing on SEC EDGAR