ADP Announces Pricing of its Senior Notes Due 2032

Rhea-AI Summary

ADP (Nasdaq: ADP) has announced the pricing of a $1.0 billion public offering of senior notes with a 4.750% interest rate, maturing in 2032. The cloud-based human capital management solutions provider expects to receive the net proceeds when the offering closes around May 8, 2025. The company plans to use the funds primarily to refinance existing debt, with any remaining amount allocated for general corporate purposes.

Positive

• Successful pricing of $1.0 billion senior notes offering indicates strong market confidence
• Refinancing existing debt could potentially improve debt structure and terms
• 4.750% interest rate secured in current market conditions

Negative

• Taking on $1.0 billion in new debt increases financial obligations
• Interest payments of 4.750% will impact cash flow through 2032

Insights

Financial Analyst

ADP's $1B debt offering at 4.750% through 2032 primarily refinances existing debt, representing standard liability management without indicating significant strategic shifts.

ADP has priced a $1.0 billion public offering of senior notes with a 4.750% interest rate maturing in 2032. This represents a substantial long-term debt instrument that will remain on ADP's balance sheet for seven years. The transaction, expected to close on May 8, 2025, involves major financial institutions as underwriters, including BofA Securities, J.P. Morgan, and Morgan Stanley.

The primary purpose of this offering is explicitly stated as refinancing existing debt, with any remainder allocated to general corporate purposes. This suggests ADP is engaging in active liability management rather than funding new strategic initiatives or acquisitions. For context, this type of refinancing activity is standard practice among large corporations seeking to optimize their capital structure.

The 4.750% coupon rate and seven-year maturity provide insight into both market conditions and ADP's standing with creditors. This offering demonstrates ADP's continued access to debt markets, allowing the company to maintain financial flexibility. Without details on the existing debt being refinanced, it's impossible to determine whether this represents more favorable terms than current obligations.

For a company of ADP's scale in the human capital management technology sector, this transaction represents routine financial engineering – realigning debt maturities and potentially optimizing interest expenses. The timing suggests management is taking a proactive approach to liability management within the current interest rate environment.

ROSELAND, N.J., May 6, 2025 /PRNewswire/ -- ADP (Nasdaq: ADP), a leading global technology company providing comprehensive cloud-based human capital management (HCM) solutions, yesterday announced the pricing of a public offering of $1.0 billion aggregate principal amount of its 4.750% senior notes due 2032.

ADP expects to receive the net offering proceeds upon closing on or about May 8, 2025. The intended use of proceeds from the offering is to refinance existing debt, and any remainder for general corporate purposes.

ADP has filed a registration statement (including a prospectus and preliminary prospectus supplement) with the Securities and Exchange Commission ("SEC") for the offering to which this communication relates. Before you invest, you should read the base prospectus in that registration statement, the applicable preliminary prospectus supplement and the other documents ADP has filed with the SEC for more complete information about ADP and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, ADP, any underwriter or any dealer participating in the offering will arrange to send investors the prospectus and preliminary prospectus supplement upon request by contacting BofA Securities, Inc. by telephone at 1-800-294-1322 or by email at dg.prospectus_requests@bofa.com, J.P. Morgan Securities LLC by telephone (collect) at (212) 834-4533 or Morgan Stanley & Co. LLC by telephone at (866) 718-1649.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the debt securities or any other securities, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The offering of these securities may be made only by means of the prospectus supplement and the accompanying prospectus. This press release also does not constitute an offer to purchase, a solicitation of an offer to sell, or notice of redemption with respect to any securities of ADP.

About ADP (NASDAQ – ADP)
Designing better ways to work through cutting-edge products, premium services and exceptional experiences that enable people to reach their full potential. HR, Talent, Time Management, Benefits and Payroll. Informed by data and designed for people. 

Forward-Looking Statements

This document and other written or oral statements made from time to time by ADP may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature and which may be identified by the use of words like "outlook," "expects," "assumes," "projects," "anticipates," "estimates," "we believe," "could," "is designed to" and other words of similar meaning, are forward-looking statements. These statements are based on management's expectations and assumptions and depend upon or refer to future events or conditions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed. Forward-looking statements are subject to inherent risks and uncertainties. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements or that could contribute to such difference include: ADP's success in obtaining and retaining clients, and selling additional services to clients; the pricing of products and services; the success of our new solutions; our ability to respond successfully to changes in technology, including artificial intelligence; compliance with existing or new legislation or regulations; changes in, or interpretations of, existing legislation or regulations; overall market, political and economic conditions, including interest rate and foreign currency trends and inflation; competitive conditions; our ability to maintain our current credit ratings and the impact on our funding costs and profitability; security or cyber breaches, fraudulent acts, and system interruptions and failures; employment and wage levels; availability of skilled associates; the impact of new acquisitions and divestitures; the adequacy, effectiveness and success of our business transformation initiatives; the impact of any uncertainties related to major natural disasters or catastrophic events; and supply-chain disruptions. The factors identified above are not exhaustive. ADP disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. These risks and uncertainties, along with the risk factors discussed under "Item 1A. - Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, and in other written or oral statements made from time to time by ADP, should be considered in evaluating any forward-looking statements contained herein.

ADP, the ADP logo, and Always Designing for People are trademarks of ADP, Inc. All other marks are the property of their respective owners.

Copyright © 2025 ADP, Inc. All rights reserved.

ADP-Media

Contact:

Allyce Hackmann
201.400.4583
Allyce.Hackmann@adp.com

ADP-Investor Relations

Contact:
ADP Investor Relations
Matthew Keating, CFA
973.974.3037
Matthew.Keating@adp.com

 

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SOURCE ADP - IR

FAQ

What is the size and interest rate of ADP's 2032 senior notes offering?

ADP's senior notes offering is $1.0 billion in aggregate principal amount with a 4.750% interest rate, maturing in 2032.

When will ADP's senior notes offering close?

The senior notes offering is expected to close on or about May 8, 2025.

How will ADP use the proceeds from the 2032 senior notes?

ADP plans to use the proceeds to refinance existing debt, with any remainder allocated for general corporate purposes.

Who are the underwriters for ADP's 2032 senior notes offering?

The offering's underwriters include BofA Securities, J.P. Morgan Securities, and Morgan Stanley & Co.