Avient Announces Commencement of $650 Million Senior Notes Offering
Rhea-AI Summary
Avient (NYSE: AVNT) has announced the commencement of a $650 million senior notes offering due 2031. The offering is exempt from registration requirements under the Securities Act of 1933. Avient plans to use the net proceeds, along with cash on hand, to redeem all outstanding 5.75% senior notes due 2025 and cover related fees and expenses.
The notes will be offered exclusively to qualified institutional buyers under Rule 144A and non-U.S. persons under Regulation S. They will not be registered under the Securities Act and cannot be offered or sold in the United States without registration or an applicable exemption. This announcement does not constitute an offer to sell, solicitation to buy, or notice of redemption for the 2025 senior notes.
Positive
- Refinancing of existing debt with potentially more favorable terms
- Potential improvement in debt maturity profile by extending to 2031
Negative
- Increase in total debt by $650 million
- Potential increase in interest expenses depending on new notes' interest rate
Insights
Avient's $650 million senior notes offering is a strategic move to refinance its existing debt. By replacing the 5.75% notes due in 2025 with new notes due in 2031, the company is likely aiming to extend its debt maturity profile and potentially secure more favorable interest rates. This could lead to reduced interest expenses and improved cash flow in the long term.
The offering, to qualified institutional buyers and non-U.S. persons, suggests a targeted approach to debt management. While this refinancing doesn't directly impact Avient's operations, it demonstrates proactive financial management. Investors should monitor the interest rate of the new notes when announced, as it will affect the company's future financial obligations and profitability.
The structure of Avient's notes offering raises important legal considerations. By utilizing Rule 144A and Regulation S exemptions, Avient avoids the more stringent registration requirements of a public offering. This approach often allows for a faster and less costly issuance process.
However, investors should note the resale restrictions that typically accompany such offerings. The company's explicit disclaimer about registration and offer limitations is a standard legal precaution to avoid potential securities law violations. This offering structure is common for corporate debt issuances and doesn't necessarily indicate any unusual legal risks for Avient or potential investors.
Avient's debt refinancing comes at a time when many companies are reassessing their capital structures amid changing market conditions. The move to extend debt maturity to 2031 suggests confidence in long-term stability and may be viewed positively by the market. However, the impact on Avient's stock will largely depend on the new notes' interest rate compared to the current 5.75%.
Investors should consider this refinancing in the context of broader industry trends. If Avient secures more favorable terms, it could enhance its competitive position in the specialty materials sector. The company's ability to attract $650 million in institutional investment may also be seen as a vote of confidence in its financial health and future prospects.
Avient intends to use the net proceeds from the offering, together with cash on hand, to redeem all of its outstanding
The notes will be offered only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act and outside
This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. This news release does not constitute a notice of redemption pursuant to the terms of the 2025 senior notes.
About Avient
Avient Corporation (NYSE: AVNT) provides specialized and sustainable materials solutions that transform customer challenges into opportunities, bringing new products to life for a better world.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectations or forecasts of future events and are not guarantees of future performance. They are based on management's expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. You can identify these statements by the fact that they do not relate strictly to historic or current facts. They use words such as "will," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe" and other words and terms of similar meaning in connection with any discussion of future operating or financial condition, performance and/or sales. Factors that could cause actual results to differ materially from those implied by these forward-looking statements include, but are not limited to: disruptions, uncertainty or volatility in the credit markets that could adversely impact the availability of credit already arranged and the availability and cost of credit in the future; the effect on foreign operations of currency fluctuations, tariffs and other political, economic and regulatory risks; disruptions or inefficiencies in our supply chain, logistics, or operations; changes in laws and regulations in jurisdictions where we conduct business, including with respect to plastics and climate change; fluctuations in raw material prices, quality and supply, and in energy prices and supply; demand for our products and services; production outages or material costs associated with scheduled or unscheduled maintenance programs; unanticipated developments that could occur with respect to contingencies such as litigation and environmental matters; our ability to pay regular quarterly cash dividends and the amounts and timing of any future dividends; information systems failures and cyberattacks; amounts for cash and non-cash charges related to restructuring plans that may differ from original estimates, including because of timing changes associated with the underlying actions; our ability to achieve strategic objectives and successfully integrate acquisitions, including the implementation of a cloud-based enterprise resource planning system, S/4HANA; other factors affecting our business beyond our control, including without limitation, changes in the general economy, changes in interest rates, changes in the rate of inflation, geopolitical conflicts, and any recessionary conditions; and other factors described in our Annual Report on Form 10-K for the year ended December 31, 2023 under Item 1A, "Risk Factors."
We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our plans and assumptions. Achievement of future results is subject to risks, uncertainties and assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Investors should bear this in mind as they consider forward-looking statements. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by law. You are advised, however, to consult any further disclosures we make on related subjects in our reports on Forms 10-Q, 8-K, and 10-K filed with the Securities and Exchange Commission. You should understand that it is not possible to predict or identify all risk factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.
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SOURCE Avient Corporation
FAQ
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