Workday sells $2.5 billion of senior notes with coupons of 5.700% to 6.500%

Workday (Nasdaq: WDAY), the human-resources and finance software company, sold $2.5 billion of senior notes in four tranches with fixed coupons of 5.700% to 6.500%, according to a Form 8-K filing dated October 23.

What happened

Workday entered into an underwriting agreement on October 21, a Wednesday, with Morgan Stanley, BofA Securities, Barclays Capital and Wells Fargo Securities as representatives of the underwriters, the filing says. It completed the sale on Friday, October 23.

The offering has four parts:

Notes due	Principal amount	Fixed rate
2029	$750.0 million	5.700%
2031	$500.0 million	6.000%
2033	$750.0 million	6.300%
2036	$500.0 million	6.500%

Source: Workday Form 8-K.

Weighted by principal amount, the four coupons average about 6.1%, a figure calculated from the rates above. Interest on each series is payable semi-annually on April 23 and October 23, starting April 23, 2027.

Workday estimated net proceeds of approximately $2.47 billion. It said it intends to use them to redeem, repay, repurchase or otherwise retire the $1.0 billion of its 3.500% notes due April 1, 2027, at or before maturity, with any remainder going to general corporate purposes.

The background

The notes are senior unsecured obligations and rank equally with Workday's existing and future unsecured and unsubordinated debt, the filing says. They were issued under Workday's shelf registration statement on Form S-3, filed with the Securities and Exchange Commission on May 29, 2026.

If a change of control triggering event occurs for a series, Workday must offer to buy back that series at 101% of principal plus accrued interest, subject to certain exceptions, according to the filing. Workday can also redeem the notes before maturity under terms set out in the indenture.

What to watch

The first interest payment on the new notes is due April 23, 2027, and the 3.500% notes that Workday intends to retire mature on April 1, 2027, according to the filing.