8-K: Keysight Technologies Announces $750 Million Notes Offering

Keysight Technologies has entered into an underwriting agreement to issue and sell $750 million in 5.350% notes due in 2030.

Summary

• Keysight Technologies, Inc. has agreed to issue and sell $750 million aggregate principal amount of 5.350% Notes due 2030.
• The underwriting agreement was entered into on April 10, 2025, with BNP Paribas Securities Corp., Citigroup Global Markets Inc., and BofA Securities, Inc. acting as representatives of the underwriters.
• The notes are being offered pursuant to an effective registration statement on Form S-3 previously filed with the SEC.
• The offering is expected to close on April 17, 2025, subject to customary closing conditions.
• The notes will bear interest at a rate of 5.350% per year, payable semi-annually on January 30 and July 30, commencing on January 30, 2026.
• The notes will mature on July 30, 2030.
• The price to the public is 99.760% of the principal amount, resulting in gross proceeds to Keysight of $748,200,000.
• The yield to maturity is 5.396%, representing a spread of +140 basis points over the benchmark treasury.
• Prior to June 30, 2030, the notes may be redeemed at the greater of (1) make-whole at T+25 basis points and (2) 100% of the principal amount being redeemed, plus accrued and unpaid interest.
• On or after June 30, 2030, the notes may be redeemed at 100% of the principal amount being redeemed, plus accrued and unpaid interest.
• In the event of a change of control repurchase event, the notes are puttable at 101% of the principal amount plus accrued and unpaid interest.

Sentiment

Score: 7

Explanation: The document is neutral to positive. It outlines a standard financial transaction (debt offering) with clear terms. The company is able to raise a significant amount of capital at reasonable terms, which is a positive indicator.

Positives

• Keysight Technologies is securing $748.2 million in gross proceeds through this notes offering.
• The offering provides Keysight with a fixed interest rate of 5.350% until 2030.
• The notes offer redemption flexibility for Keysight, with make-whole provisions prior to June 30, 2030, and redemption at par thereafter.
• The inclusion of a change of control repurchase event provides protection for noteholders.

Risks

• The closing of the offering is subject to customary closing conditions, which if not met, could prevent the issuance of the notes.
• Changes in market conditions could impact the trading price of the notes.
• Keysight's ability to meet its debt obligations could be affected by future financial performance and economic conditions.

Future Outlook

The company intends to use the net proceeds from the sale of the securities as described in the Pricing Prospectus under the heading Use of Proceeds.

Industry Context

This debt offering reflects Keysight's strategy to manage its capital structure and potentially fund future growth initiatives or refinance existing debt. The terms of the offering, including the interest rate and maturity date, are influenced by prevailing market conditions and Keysight's credit profile.

Comparison to Industry Standards

• Comparable companies in the technology sector, such as Texas Instruments and Analog Devices, have recently issued debt with similar maturities and credit ratings.
• The coupon rate of 5.350% is within the typical range for investment-grade corporate bonds with a 5-year maturity in the current interest rate environment.
• The spread of +140 basis points over the benchmark treasury is consistent with market pricing for companies with similar credit risk.
• The make-whole redemption provision is a common feature in corporate bond offerings, providing investors with compensation if the issuer redeems the bonds prior to maturity.

Stakeholder Impact

• Shareholders: The debt offering could impact shareholder value depending on how the proceeds are used and the company's ability to service the debt.
• Employees: The capital raised could support future investments in the business, potentially leading to job creation or stability.
• Creditors: The new debt issuance will increase Keysight's overall debt obligations.
• Customers: The offering is not expected to have a direct impact on customers.

Next Steps

• The offering is expected to close on April 17, 2025, subject to customary closing conditions.
• Keysight will file the Prospectus pursuant to Rule 424(b) under the Securities Act.
• The company will apply the net proceeds from the sale of the Securities as described in the Pricing Prospectus under the heading Use of Proceeds.

Key Dates

Keywords

Notes, Debt, Offering, Underwriting, Keysight Technologies, Securities