Dun & Bradstreet Announces Refinancing of Term Loan and Revolving Credit Facilities

Rhea-AI Summary

Dun & Bradstreet (DNB) successfully refinanced its Term Loan and Revolving Credit facilities, repricing and extending maturities of the entire secured layer of its capital structure, approximately $4.0 billion. The transaction resulted in reduced drawn spread and extended maturity, with proceeds used to repay existing initial Term Loans. The CFO emphasized the company's focus on investing in organic growth acceleration and improving leverage profile.

Financial Analyst

The refinancing of Dun & Bradstreet's credit facilities and term loans represents a strategic financial maneuver aimed at optimizing the company's capital structure. By securing lower interest rates and extending maturities, the company has effectively reduced its cost of debt. This should result in immediate interest expense savings, positively impacting net income and cash flow. The removal of the credit spread adjustment (CSA) further decreases interest costs, enhancing the company's financial flexibility.

Investors should note the leverage neutral nature of the transaction, indicating that while the company's total debt remains unchanged, the cost and term structure of the debt are now more favorable. The additional 0.25% coupon step-down contingent on credit rating improvements provides an incentive for the company to maintain a strong credit profile, which could lead to further cost savings and signal financial stability to the market.

Market Research Analyst

From a market perspective, Dun & Bradstreet's successful upsizing of the Term Loan B-2 indicates robust market demand and confidence in the company's creditworthiness. The favorable debt market conditions that allowed for this refinancing may reflect a broader trend of accessible liquidity and investor appetite for corporate debt, which can be beneficial for other firms considering similar strategic financial actions.

The market's response to this news may include a reassessment of Dun & Bradstreet's risk profile, potentially affecting the stock price. The extended debt maturity also alleviates short-term liquidity concerns, which can be reassuring to investors who prioritize stability in their investment decisions.

Debt Capital Markets Expert

The transaction's technical aspects, such as the repricing at par and the reduction in drawn spread, indicate Dun & Bradstreet's strong negotiation position and market conditions that allowed for favorable terms. The ability to reprice existing debt and extend maturities without a discount is a testament to the company's creditworthiness and the current state of the debt capital markets.

Understanding the impact of the SOFR (Secured Overnight Financing Rate) in the repricing is crucial, as it has become a standard benchmark for pricing loans and derivatives post-LIBOR. The 0.25% reduction in the coupon tied to SOFR represents a significant decrease in interest payments, which is particularly relevant given the size of the transaction. This strategic move could set a precedent for other companies with substantial debt seeking to improve their debt terms in the current market environment.

JACKSONVILLE, Fla.--(BUSINESS WIRE)-- Dun & Bradstreet (NYSE:DNB), a leading global provider of business decisioning data and analytics, today announced that its wholly-owned subsidiary, The Dun & Bradstreet Corporation, has successfully refinanced its Term Loan and Revolving Credit facilities. The transaction took advantage of a favorable market issuance window and successfully repriced and extended maturities of the entire secured layer of its capital structure, approximately $4.0 billion.

The transaction:

• Repriced and extended $850 million Revolving Credit Facility due 2025 at par
  • Reduced drawn spread by 0.50% across the pricing grid and removed credit spread adjustment (“CSA”) of 0.10% resulting in 0.60% reduction in aggregate
  • Extended maturity by approximately 3.4 years to February 2029
• Repriced $452 million Term Loan B-2 due 2029
  • Repriced coupon down by 0.25% (from SOFR+3.00% to SOFR+2.75%) at par
• Raised $2,652 million add-on to repriced Term Loan B-2, due 2029 at par and proceeds were used to repay existing initial Term Loans, resulting in a leverage neutral transaction
  • Initially launched at $1,750 million and was successfully upsized in market to $2,652 million
  • Effectively removed the CSA and extended maturity of the existing Term Loan B-1 due 2026 by approximately 3 years
  • Added additional 0.25% coupon step-down upon achieving Ba3/BB– Corporate Family Ratings from Moody’s and S&P, respectively, for the entire $3.1 billion term loan amount

"By proactively capitalizing on the favorable debt market environment, we are very pleased with execution and closing of this refinancing,” said Bryan Hipsher, Chief Financial Officer of Dun & Bradstreet. “We continue to focus on investing in organic growth acceleration and improving our leverage profile through enhanced profitability and the reduction of debt to drive long-term shareholder value.”

Additional details on the terms of the amendment are available in the 8-K filed with the Securities and Exchange Commission on January 30, 2024.

About Dun & Bradstreet

Dun & Bradstreet, a leading global provider of business decisioning data and analytics, enables companies around the world to improve their business performance. Dun & Bradstreet’s Data Cloud fuels solutions and delivers insights that empower customers to accelerate revenue, lower cost, mitigate risk, and transform their businesses. Since 1841, companies of every size have relied on Dun & Bradstreet to help them manage risk and reveal opportunity. For more information on Dun & Bradstreet, please visit www.dnb.com.

Forward Looking Statement

The statements contained in this release that are not purely historical are forward-looking statements, including statements regarding expectations, hopes, intentions or strategies regarding the future. Forward-looking statements are based on Dun & Bradstreet’s management’s beliefs, as well as assumptions made by, and information currently available to, them. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods, or by the inclusion of forecasts or projections. Examples of forward-looking statements include, but are not limited to, statements we make regarding the outlook for our future business and financial performance. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. It is not possible to predict or identify all risk factors. Consequently, the risks and uncertainties listed below should not be considered a complete discussion of all of our potential trends, risks and uncertainties. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

The risks and uncertainties that forward-looking statements are subject to include, but are not limited to: (i) our ability to implement and execute our strategic plans to transform the business; (ii) our ability to develop or sell solutions in a timely manner or maintain client relationships; (iii) competition for our solutions; (iv) harm to our brand and reputation; (v) unfavorable global economic conditions including, but not limited to, volatility in interest rates, foreign currency markets, inflation, and supply chain disruptions; (vi) risks associated with operating and expanding internationally; (vii) failure to prevent cybersecurity incidents or the perception that confidential information is not secure; (viii) failure in the integrity of our data or systems; (ix) system failures and personnel disruptions, which could delay the delivery of our solutions to our clients; (x) loss of access to data sources or ability to transfer data across the data sources in markets where we operate; (xi) failure of our software vendors and network and cloud providers to perform as expected or if our relationship is terminated; (xii) loss or diminution of one or more of our key clients, business partners or government contracts; (xiii) dependence on strategic alliances, joint ventures and acquisitions to grow our business; (xiv) our ability to protect our intellectual property adequately or cost-effectively; (xv) claims for intellectual property infringement; (xvi) interruptions, delays or outages to subscription or payment processing platforms; (xvii) risks related to acquiring and integrating businesses and divestitures of existing businesses; (xviii) our ability to retain members of the senior leadership team and attract and retain skilled employees; (xix) compliance with governmental laws and regulations; (xx) risks related to registration and other rights held by certain of our largest shareholders; (xxi) an outbreak of disease, global or localized health pandemic or epidemic, or the fear of such an event, including the global economic uncertainty and measures taken in response; (xxii) increased economic uncertainty related to the ongoing conflict between Russia and Ukraine, the conflict in the Middle East, and associated trends in macroeconomic conditions, and (xxiii) the other factors described under the headings “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Cautionary Note Regarding Forward-Looking Statements” and other sections of our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on February 23, 2023.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240130697577/en/

For more information:

Investor Contact:

904-648-8006

IR@dnb.com

Media Contact:

Dawn McAbee

904-648-6328

Mcabeed@dnb.com

Source: Dun & Bradstreet

What did Dun & Bradstreet (DNB) announce?

Dun & Bradstreet announced the successful refinancing of its Term Loan and Revolving Credit facilities, repricing and extending maturities of the entire secured layer of its capital structure, approximately $4.0 billion.

What were the key changes in the transaction?

The transaction resulted in reduced drawn spread by 0.50% across the pricing grid, removed credit spread adjustment of 0.10%, extended maturity by approximately 3.4 years to February 2029, and added an additional 0.25% coupon step-down upon achieving Ba3/BB– Corporate Family Ratings from Moody’s and S&P.

What did the CFO emphasize about the company's focus?

The CFO emphasized the company's focus on investing in organic growth acceleration and improving leverage profile through enhanced profitability and debt reduction to drive long-term shareholder value.

Where can additional details on the terms of the amendment be found?

Additional details on the terms of the amendment are available in the 8-K filed with the Securities and Exchange Commission on January 30, 2024.