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The Estée Lauder Companies to Issue $650.0 Million of Senior Notes

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Estée Lauder Companies Inc. announces the offering and pricing of $650.0 million aggregate principal amount of its 5.000% Senior Notes due 2034, following a registration statement filed with the SEC. The closing is expected soon.
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The issuance of $650 million in Senior Notes at a 5.000% interest rate by Estée Lauder is a significant move that will impact the company's capital structure and financial leverage. The interest rate offered suggests a moderate level of risk as perceived by the market, considering the current interest rate environment. Investors and analysts will be interested in how these funds will be allocated, whether it be for acquisitions, paying down existing debt, or other strategic investments.

It's crucial to assess the company's debt-to-equity ratio post-issuance and compare it to industry benchmarks. A higher ratio may indicate increased leverage, which can amplify returns but also increases financial risk. The long-term nature of the notes, maturing in 2034, provides Estée Lauder with a stable source of capital but commits the company to long-term interest payments, which could affect net income due to the fixed interest expense.

Estée Lauder's decision to enter the debt market can be seen as a strategic move to capitalize on the current market conditions. The beauty industry is highly competitive and companies often require substantial capital for marketing, research and development and expansion. The proceeds from the notes could be used to strengthen Estée Lauder's competitive position by investing in these areas or by pursuing strategic acquisitions that could enhance their portfolio of brands.

Moreover, the market's response to this offering could serve as an indicator of investor confidence in the luxury beauty sector and Estée Lauder's financial health. A successful closing of the offering would demonstrate market trust, potentially influencing the stock's performance positively.

The broader economic implications of Estée Lauder's bond issuance reflect the company's assessment of economic conditions and capital market trends. A 5.000% yield is indicative of the current economic environment, where interest rates are expected to rise as central banks aim to combat inflation. Estée Lauder locking in a fixed interest rate for an extended period could be advantageous if interest rates continue to climb.

Furthermore, the bond issuance could have a multiplier effect on the economy if the company uses the capital for expansionary activities, potentially leading to job creation and increased economic activity in the sectors where Estée Lauder operates. However, if the funds are primarily used for refinancing existing debt, the immediate economic impact may be more muted.

NEW YORK--(BUSINESS WIRE)-- The Estée Lauder Companies Inc. (NYSE: EL) today announced the offering and pricing of $650.0 million aggregate principal amount of its 5.000% Senior Notes due 2034.

The offering was made pursuant to an effective registration statement filed by The Estée Lauder Companies Inc. with the Securities and Exchange Commission on May 20, 2021. The closing of the offering is expected to occur on or about February 14, 2024.

The Company intends to use the net proceeds of this offering for general corporate purposes, which may include funding a portion of the purchase price to purchase the remaining interest in DECIEM, operating expenses, working capital, capital expenditures and redemption and repayment of short-term or long-term borrowings, including outstanding commercial paper as it matures. Pending any specific application, the Company may initially invest funds in short-term marketable securities.

BofA Securities, Inc., Goldman Sachs & Co. LLC, MUFG Securities Americas Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are the joint book-running managers for the offering. Copies of the prospectus supplement and accompanying prospectus may be obtained, when available, by contacting BofA Securities, Inc., 201 North Tryon Street, NC1-022-02-25, Charlotte, NC 28255-0001, Attn: Prospectus Department, by calling toll free 1-800-294-1322; Goldman Sachs & Co. LLC, Prospectus Department, 200 West Street, New York, NY 10282, by calling 1-866-471-2526 or by emailing Prospectus-ny@ny.email.gs.com or MUFG Securities Americas Inc. 1221 Avenue of the Americas, 6th Floor New York, New York 10020, Attn: Capital Markets Group, or by calling 1-877-649-6848.

An electronic copy of the prospectus supplement and accompanying prospectus will also be available on the website of the Securities and Exchange Commission at http://www.sec.gov.

This press release does not constitute an offer to sell or the solicitation of an offer to buy the notes, nor shall there be any sale of these notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. A registration statement relating to the notes became effective on May 20, 2021, and this offering is being made by means of a prospectus supplement.

About The Estée Lauder Companies Inc.

The Estée Lauder Companies Inc. is one of the world’s leading manufacturers, marketers and sellers of quality skin care, makeup, fragrance and hair care products, and is a steward of luxury and prestige brands globally. The Company’s products are sold in approximately 150 countries and territories under brand names including: Estée Lauder, Aramis, Clinique, Lab Series, Origins, M·A·C, La Mer, Bobbi Brown Cosmetics, Aveda, Jo Malone London, Bumble and bumble, Darphin Paris, TOM FORD, Smashbox, AERIN Beauty, Le Labo, Editions de Parfums Frédéric Malle, GLAMGLOW, KILIAN PARIS, Too Faced, Dr.Jart+, and the DECIEM family of brands, including The Ordinary and NIOD.

Investors:

Rainey Mancini

rmancini@estee.com



Media:

Jill Marvin

jimarvin@estee.com

Source: The Estée Lauder Companies Inc.

Estée Lauder Companies Inc. offered $650.0 million aggregate principal amount of its 5.000% Senior Notes due 2034.

The closing of the offering is expected to occur soon.

The ticker symbol for Estée Lauder Companies Inc. is EL.
Estee Lauder Cos., Inc.

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About EL

the estée lauder companies inc. is one of the world's leading manufacturers and marketers of quality skin care, makeup, fragrance and hair care products. as the global leader in prestige beauty, we touch over half a billion consumers a year. our company's products are sold in over 150 countries and territories under the following brand names: aerin, aramis, aveda, becca, bobbi brown, bumble and bumble, by kilian, clinique, darphin, donna karan new york, dkny, editions de parfums frédéric malle, ermenegildo zegna, estée lauder, glamglow, jo malone london, kiton, la mer, lab series, le labo, m•a•c, michael kors, origins, prescriptives, rodin olio lusso, smashbox, tom ford, tommy hilfiger, too faced and tory burch. to explore our current job openings, go to www.elcompanies.com/