Workday prices $2.5 billion bond offering to refinance debt and fund general purposes
Key Facts
Workday announced on October 21, 2026, that it had priced a bond offering totaling $2.5 billion, combining the refinancing of a near-term maturity with funding for general corporate purposes, according to the company's statement and offering prospectus. In the prospectus filed with the U.S. Securities and Exchange Commission, the company identified $1.0 billion of outstanding bonds it intends to retire using proceeds from the new issue. The bonds targeted for retirement carry a 3.500% coupon and mature on April 1, 2027, the maturity the company is addressing through the financing. Workday said it intends to repay this debt at or before maturity, leaving the timing of its retirement within those two options. The company plans to use the remaining proceeds for general corporate purposes, according to the use specified in the prospectus.
The offering comprises tranches with different principal amounts, coupons and maturities, according to the pricing details announced by Workday. The tranche due in 2029 totals about $750 million and carries a 5.700% coupon, while the tranche due in 2031 totals about $500 million with a 6.000% coupon. The transaction also includes a $750 million tranche due in 2033 with a 6.300% coupon, alongside a $500 million tranche due in 2036 with a 6.500% coupon. Coupons therefore rise as maturities lengthen across the new tranches, and all exceed the 3.500% coupon on the outstanding bonds the company intends to retire. Workday described the new securities in the prospectus as "senior unsecured obligations," a classification relating to the priority of repayment claims. These bonds rank equally in right of payment with the company's other unsecured and unsubordinated debt, according to the terms in the prospectus.
Workday has previously raised financing in the bond market; it said in its quarterly report filed with the U.S. Securities and Exchange Commission that it issued senior notes totaling $3.0 billion during its fiscal year 2023. On liquidity, second-quarter results showed cash, cash equivalents and marketable securities of about $3.403 billion as of July 31, 2026. In the fiscal quarter ended on that date, the company generated operating cash flow of $520 million, compared with $616 million in the corresponding period a year earlier, according to its earnings statement. Cash flow from operations was thus below its level in the year-earlier quarter, while the company spent $1.3 billion repurchasing its Class A shares during the same fiscal quarter. Spending on share repurchases exceeded operating cash flow for that quarter, against a financial backdrop combining cash and securities holdings, cash generation from operations and returns to shareholders.
Alongside the bond financing, Workday reported in its preliminary prospectus that it had no outstanding borrowings under its revolving credit facility at the time the prospectus was prepared. The new revolving facility matures on October 1, 2031, according to a separate disclosure the company filed with the U.S. Securities and Exchange Commission, placing its maturity within the period covered by the new bond maturities. In the stock market, Workday shares closed at $202.96 in the October 21, 2026, session, according to EL7 data, the session during which the company announced the offering's pricing. The next step in the financing is the closing, which the company expects on October 23, 2026, according to the date in its pricing statement. Completion of the offering on that date remains subject to the customary closing conditions Workday cited in its announcement.