Item 1.01 Entry into a Material Definitive Agreement
3.50% First-Priority Senior Secured Notes due 2028
General
On February 9, 2021 (the
Closing Date), Rackspace Technology Global, Inc. (the Company), a wholly-owned subsidiary of Rackspace Technology, Inc., completed its previously announced offering of $550.0 million in aggregate principal
amount of 3.50% First-Priority Senior Secured Notes due 2028 (the Notes). The Notes were issued pursuant to an indenture, dated as of February 9, 2021 (the Indenture), among the Company, the subsidiary
guarantors party thereto from time to time (the Subsidiary Guarantors) and Wells Fargo Bank, National Association, as trustee (the Trustee).
The Notes bear interest at a fixed rate of 3.50% per annum, accruing from February 9, 2021. Interest is payable semiannually in arrears
on February 15 and August 15 of each year, commencing on August 15, 2021. The Notes will mature on February 15, 2028. The Notes are fully and unconditionally guaranteed, jointly and severally, by each of the Subsidiary
Guarantors. The Notes and the related guarantees are secured by first-priority security interests in substantially all material owned assets of the Company and the Subsidiary Guarantors, including the equity interest held by each, subject to certain
exceptions, which assets also secure the Companys Senior Facilities (as defined below).
The Notes were offered and sold to
qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the Securities Act), and to certain non-U.S. persons in transactions outside
the United States pursuant to Regulation S under the Securities Act. The Notes are not subject to registration rights.
The net proceeds
from the sale of the Notes, together with borrowings under the New Term Loan Facility described below, were used to repay all borrowings outstanding under the Companys existing term loan facility, to pay related fees and expenses and for
general corporate purposes.
Redemption
The Company may redeem some or all of the Notes at its option prior to February 15, 2024 at a redemption price equal to 100% of the
principal amount of the Notes redeemed, plus a customary make-whole premium described in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, at any time prior to February 15,
2024, the Company may also redeem up to 40% of the aggregate principal amount of the Notes with funds in an aggregate amount not to exceed the net cash proceeds from certain equity offerings at a redemption price equal to 103.50% of the principal
amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
Commencing
February 15, 2024, the Company may redeem the Notes at its option, in whole at any time or in part from time to time, at the following redemption prices: from February 15, 2024 to February 14, 2025, at a redemption price equal to
101.750% of the principal amount, plus accrued and unpaid interest, if any, to but excluding the redemption date; from February 15, 2025 to February 14, 2026, at a redemption price equal to 100.875% of the principal amount, plus accrued
and unpaid interest, if any, to but excluding the redemption date; and from February 15, 2026 and thereafter, at a redemption price equal to 100.000% of the principal amount, plus accrued and unpaid interest, if any, to but excluding the
redemption date.
Notwithstanding the foregoing, the Company may redeem during each twelve-month period, commencing with the Closing Date,
up to 10% of the original aggregate principal amount of the Notes at a redemption price of 103.00%, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.