Dell Seeks to Raise $4 Billion From Bond Sale to Refinance Debt

(Bloomberg) -- Dell Technologies Inc. is seeking to raise about $4 billion from an investment-grade bond sale, joining a wave of issuers seeking to refinance debt as it rides an AI-driven boom in demand for servers.

No final decision has been made on the size of the offering, which may change according to demand, according to people familiar with the matter.

The company is offering bonds in four tranches, with maturities ranging from three to 10 years, a separate person said, asking not to be identified because they're not authorized to speak publicly. Initial price talk on the longest tenor is a premium of as much as 1.4 percentage point over Treasuries, the person added.

Proceeds will be used to repay outstanding notes due in 2026 and fund general corporate purposes, the person said.

Dell, which makes servers and other data-center equipment, has seen its stock surge about 340% this year as it benefits from a surge in demand for artificial intelligence infrastructure. Earlier this month, the company raised its fiscal year sales forecast by $25 billion, surprising analysts.

The company is securing contracts for machines packed with Nvidia Corp.'s AI chips, as well as for traditional servers. That equipment contains the type of central processing units, or CPUs, that have regained momentum because they are useful for tasks like managing AI agents.

Barclays Plc, Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., HSBC Holdings Plc, JPMorgan Chase & Co., the Toronto-Dominion Bank and Wells Fargo & Co. are managing Dell's bond offering. The company and the banks either declined to comment or didn't immediately respond to requests for comment.

The bond offering "should reinforce an already solid credit profile as AI drives record operating momentum," Bloomberg Intelligence analyst Robert Schiffman said in a note to clients. "Dell has room to refinance maturities and increase shareholder returns while preserving its mid BBB credit profile," he added.

Dell adds to a wave of companies tapping the investment-grade debt market after a late-summer lull. About 17 companies are expected to sell bonds on Wednesday, according to an informal poll of dealers. Smith & Nephew Plc, Blue Owl Credit Income Corp., Rogers Communications Inc. and Southern Co. are among companies seeking to refinance debt.