WDAY Workday Inc

On March 30, 2022, Workday, Inc. (“Workday”) entered into an Underwriting Agreement (the “Underwriting Agreement”) with BofA Securities, Inc., Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC, as representatives of the underwriters named therein. The Underwriting Agreement provides for the issuance and sale by Workday of $3.0 billion aggregate principal amount of senior notes, consisting of $1.0 billion aggregate principal amount of 3.500% notes due 2027 (the “2027 Notes”), $750.0 million aggregate principal amount of 3.700% notes due 2029 (the “2029 Notes”), and $1.25 billion aggregate principal amount of 3.800% notes due 2032 (the “2032 Notes,” and together with the 2027 Notes and the 2029 Notes, the “Notes”), in an underwritten public offering (the “Offering”).

The Underwriting Agreement contains customary representations, warranties and covenants. These representations, warranties and covenants are not representations of factual information to investors about Workday or its subsidiaries, and the sale of any Notes pursuant to the Underwriting Agreement is not a representation that there has not been any change in the condition of Workday. The foregoing description of the terms of the Underwriting Agreement is not complete and is subject to, and qualified in its entirety by reference to, the complete terms and conditions of the Underwriting Agreement, which is filed as Exhibit 1.1 and is incorporated by reference herein.

On April 1, 2022, Workday, Inc. (“Workday”) completed its issuance and sale of the Notes pursuant to the Underwriting Agreement and an Indenture dated as of April 1, 2022 (the “Base Indenture”), between Workday and U.S. Bank Trust Company National Association, as trustee, together with an officer’s certificate, dated April 1, 2022 (the “Officer’s Certificate,” and, together with the Base Indenture, the “Indenture”). The Notes were issued and sold pursuant to Workday’s effective shelf registration statement on Form S-3 (Registration No. 333-239056) filed with the Securities and Exchange Commission on June 10, 2020, and a related preliminary prospectus supplement, dated March 30, 2022 and a final prospectus supplement, dated March 30, 2022.

Workday estimates that the net proceeds from the Offering will be approximately $2.98 billion, after deducting the underwriting discounts and estimated offering expenses payable by Workday. Workday intends to use the net proceeds from the sale of the Notes for general corporate purposes, which includes repaying an aggregate principal amount of $693.8 million outstanding under its existing senior unsecured term loan facility, and which may include repaying the $1.15 billion outstanding balance of its 0.25% convertible senior notes due 2022 maturing on October 1, 2022. General corporate purposes may also include additions to working capital, financing of capital expenditures, and future acquisitions and strategic investment opportunities. Pending other uses, Workday intends to invest the net proceeds to Workday in investment-grade, interest-bearing securities such as money market funds, certificates of deposit, corporate debt, direct or guaranteed obligations of the U.S. government, or term deposits, or hold as cash. Workday may temporarily invest funds that are not immediately needed for these purposes in short-term investments, including cash, cash equivalents or marketable securities, or use funds to reduce outstanding short-term borrowings.

The Notes are senior unsecured obligations of Workday and rank equally with all existing and future unsecured and unsubordinated indebtedness of Workday. The 2027 Notes will mature on April 1, 2027 and bear interest at a fixed rate of 3.500% per annum, payable semi-annually in arrears on April 1 and October 1 of each year, commencing on October 1, 2022. The 2029 Notes will mature on April 1, 2029 and bear interest at a fixed rate of 3.700% per annum, payable semi-annually in arrears on April 1 and October 1 of each year, commencing on October 1, 2022. The 2032 Notes will mature on April 1, 2032 and bear interest at a fixed rate of 3.800% per annum, payable semi-annually in arrears on April 1 and October 1 of each year, commencing on October 1, 2022. The Notes are redeemable at the option of Workday, at any time in whole or from time to time in part, at the applicable dates of redemption and applicable redemption prices specified in the forms of Note included in Exhibits 4.3, 4.4 and 4.5 hereto (together, the “Forms of Note”).

In addition, if a Change of Control Triggering Event (as defined in the Forms of Note) occurs with respect to the Notes, Workday will be required, subject to certain exceptions, to make an offer to purchase all or any part of the Notes at a purchase price in cash equal to 101% of the aggregate principal amount of the Notes to be purchased, plus accrued and unpaid interest, if any, on such Notes to, but excluding, the repurchase date. The Indenture also contains certain other covenants (including certain limited covenants restricting Workday’s ability to incur certain liens and enter into certain sale and leaseback transactions), events of default and other customary provisions.

The foregoing description of the terms of the Notes is not complete and is subject to, and qualified in its entirety by reference to, the complete terms and conditions of the Base Indenture and the Officer’s Certificate (including the Forms of Note included therein), which are filed as Exhibits 4.1, 4.2, 4.3, 4.4 and 4.5 hereto, respectively, and are incorporated by reference herein. In connection with the issuance of the Notes, Fenwick & West LLP provided Workday with the legal opinion and consent attached hereto as Exhibit 5.1 and Exhibit 23.1, respectively.