ATLANTA, GA – Newell Brands Inc. (NASDAQ:NWL), a leading global consumer goods company, announced on Monday the issuance and sale of $1.25 billion in senior notes. The company entered into an underwriting agreement with J.P. Morgan Securities LLC, representing the underwriters, to offer $750 million of 6.375% notes due 2030 and $500 million of 6.625% notes due 2032.
The proceeds from the sale are earmarked to fully redeem the company's 4.875% senior notes due in 2025 and to partially redeem its 4.200% senior notes due in 2026. This strategic financial move is part of Newell Brands' broader efforts to manage its debt profile effectively.
The offering was made possible through an effective shelf registration statement filed with the Securities and Exchange Commission on May 20, 2024, and became effective on May 31, 2024.
Newell Brands, headquartered in Atlanta, Georgia, is known for its diverse portfolio of consumer and commercial products that are marketed under various well-known brand names. The company's financial strategy, including the latest offering, is closely watched by investors for signs of its long-term fiscal health and operational efficiency.
In other recent news, Newell Brands reported its third-quarter 2024 financial results, revealing a blend of challenges and strategic successes. The company reported a sequential improvement in core sales, a significant rise in normalized gross margin to 35.4%, and a reduction in net debt by over $560 million. Despite these achievements, Newell Brands also experienced a 1.7% decline in core sales and a 4.9% decrease in net sales.
In response to these results, Canaccord Genuity maintained a Buy rating on Newell Brands and increased the price target to $13.00. The firm's analysis suggests that Newell Brands' new strategy, focusing investment on its largest and most profitable brands, is showing positive results.
The company's management anticipates a return to top-line growth sometime in the coming year, a prospect that supports Canaccord Genuity's confidence in the company's strategic direction. Newell Brands has also raised its full-year outlook for operating margin, earnings per share, and cash flow, reflecting increased estimates based on the company's performance.
InvestingPro Insights
Newell Brands' recent financial maneuver aligns with its positive stock performance over the past year. According to InvestingPro data, the company has seen a robust 29.13% price total return over the last 12 months, indicating growing investor confidence. This upward trend is further supported by a 15.9% year-to-date return, suggesting that the market has responded favorably to the company's strategic decisions, including its debt management efforts.
The company's decision to issue new senior notes at higher interest rates to redeem existing lower-rate notes may be viewed as a proactive step to extend debt maturities in a rising interest rate environment. This aligns with an InvestingPro Tip that highlights Newell Brands' high debt burden, which the company appears to be actively managing through this refinancing initiative.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights that could provide further context to Newell Brands' financial strategy and market position.
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