Shares of Seagate Technology climbed 10 percent on Wednesday after the data storage company announced a USD500 million debt exchange agreement, a move seen by investors as easing its near-term financing pressure.
Seagate and its subsidiary, Seagate HDD Cayman, entered into privately negotiated exchange agreements with a limited number of holders of Seagate HDD’s 3.50 percent Exchangeable Senior Notes due 2028. Under the deal, noteholders agreed to swap USD500 million in principal debt for a mix of USD503.4 million in cash and Seagate ordinary shares. The transaction, expected to close by November 10, is subject to customary conditions.
Once completed, the exchanged notes will be retired, leaving about USD1.0 billion in aggregate principal amount of the 2028 notes outstanding. The exchanges are being conducted as private placements.
The move is viewed as a strategic step to improve Seagate’s balance sheet and strengthen investor confidence amid growing capital needs in the data storage industry. Demand for storage solutions has risen sharply alongside the global buildout of artificial intelligence infrastructure, which requires large-scale data capacity.
Seagate’s stock rally outpaced peers, with Western Digital shares also gaining 5.2 percent. Analysts said the market’s positive reaction reflects optimism that Seagate’s financial restructuring will give it more flexibility to capitalize on AI-driven growth opportunities, while keeping debt levels manageable as the sector continues to expand.
