Gen Announces Proposed Offering of Senior Notes

Rhea-AI Summary

Gen Digital (NASDAQ: GEN) has announced a proposed private offering of $1,100 million in senior notes due 2033. The company plans to use the proceeds to repurchase all outstanding 5.00% Senior Notes due 2025 and for general corporate purposes. The offering is exclusively available to qualified institutional buyers under Rule 144A and non-U.S. investors under Regulation S of the Securities Act.

The notes will not be registered under the Securities Act or state securities laws, requiring an applicable exemption for any U.S. sales. This announcement does not constitute an offer to sell, purchase, or a solicitation of an offer to buy or sell securities.

Positive

• Refinancing of existing debt through new notes offering
• Large offering size of $1.1 billion indicates strong institutional interest
• Extended debt maturity to 2033 improves long-term debt structure

Negative

• Additional long-term debt obligation of $1.1 billion
• Potential increase in interest expenses depending on new notes' terms

Insights

Fixed Income Analyst

This $1.1 billion senior notes offering represents a strategic debt refinancing move by Gen Digital that warrants careful analysis. The company is effectively managing its debt maturity profile by replacing the 2025 notes, which provides several key advantages in the current market environment.

The timing of this refinancing is particularly noteworthy. With the 2025 notes approaching maturity, Gen is proactively addressing its debt structure while potentially capitalizing on the recent stabilization in interest rates. This move eliminates near-term refinancing risk and extends the company's debt maturity profile by eight years to 2033, which enhances financial flexibility.

The private placement approach through Rule 144A suggests a targeted strategy to access institutional investors while maintaining pricing efficiency. This method typically allows for faster execution and potentially more favorable terms compared to a public offering, as institutional investors generally have a deeper understanding of credit risk and market dynamics.

From a credit perspective, this refinancing is likely to be viewed positively by rating agencies, as it addresses upcoming maturities and demonstrates strong market access. While the new interest rate terms haven't been disclosed, the extended maturity provides better visibility on Gen's long-term capital structure and debt service obligations.

The inclusion of "general corporate purposes" in the use of proceeds provides additional financial flexibility, though the primary focus appears to be the refinancing of existing debt. This structure allows Gen to maintain its strategic initiatives while potentially optimizing its cost of capital in the current market environment.

TEMPE, Ariz. and PRAGUE, Feb. 13, 2025 /PRNewswire/ -- Gen Digital Inc. (NASDAQ: GEN), a global leader dedicated to powering Digital Freedom through its family of consumer brands, announced today that it is proposing to sell $1,100 million aggregate principal amount of senior notes due 2033 (the "Notes") in a private offering (the "Notes Offering") that is exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act").

We intend to use the net proceeds of this Notes Offering (i) to repurchase all of our outstanding 5.00% Senior Notes due 2025 (the "2025 Notes") and pay accrued and unpaid interest thereon and (ii) for general corporate purposes.

The Notes are being offered only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act, and outside the United States, only to non-U.S. investors pursuant to Regulation S. The Notes will not be registered under the Securities Act or the securities laws of any state and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful. This press release also shall not constitute an offer to purchase, a solicitation of an offer to sell, or notice of redemption with respect to the 2025 Notes. This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act.

About Gen 

Gen™ (NASDAQ: GEN) is a global company dedicated to powering Digital Freedom through its trusted Cyber Safety brands, Norton, Avast, LifeLock, Avira, AVG, ReputationDefender and CCleaner. The Gen family of consumer brands is rooted in providing safety for the first digital generations. Now, Gen empowers people to live their digital lives safely, privately, and confidently today and for generations to come. Gen brings award-winning products and services in cybersecurity, online privacy and identity protection to nearly 500 million users in more than 150 countries. Learn more at GenDigital.com. 

Cautionary Statement Concerning Forward-Looking Statements

This press release contains forward-looking statements, which are subject to safe harbors under the Exchange Act of 1934, as amended. Forward-looking statements include statements that represent our expectations or beliefs concerning future events, including, without limitation, references to our ability to utilize our deferred tax assets, as well as statements including words such as "expects," "plans," "anticipates," "believes," "estimates," "predicts," "goal," "intent," "momentum," "projects," "forecast," "outlook," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," "will be," and similar expressions. In addition, projections of our future financial performance, anticipated growth and trends in our businesses and in our industries, the consummation of or anticipated impacts of acquisitions, divestitures, restructurings, stock repurchases, financings, debt repayments and investment activities, the outcome or impact of pending litigation, claims or disputes, our intent to pay quarterly cash dividends in the future, plans for and anticipated benefits of our products and solutions, anticipated tax rates, benefits and expenses, the impact of inflation, fluctuations in foreign currency exchange rates, changes in interest rates, ongoing and new geopolitical conflicts, and other global macroeconomic factors on our operations and financial performance, the expected impact of our new strategy and other characterizations of future events or circumstances are forward-looking statements. These statements are only predictions, based on our current expectations about future events and may not prove to be accurate. We do not undertake any obligation to update these forward-looking statements to reflect events occurring or circumstances arising after the date of this press release.

Investor Contact

Jason Starr
Gen
IR@GenDigital.com 

View original content to download multimedia:https://www.prnewswire.com/news-releases/gen-announces-proposed-offering-of-senior-notes-302376099.html

SOURCE Gen Digital Inc.

FAQ

What is the size of Gen Digital's (GEN) 2033 senior notes offering?

Gen Digital (GEN) is proposing to sell $1,100 million aggregate principal amount of senior notes due 2033.

How will Gen Digital (GEN) use the proceeds from the 2033 notes offering?

Gen Digital will use the proceeds to repurchase all outstanding 5.00% Senior Notes due 2025 and for general corporate purposes.

Who can purchase Gen Digital's (GEN) 2033 senior notes?

The notes are only available to qualified institutional buyers under Rule 144A and non-U.S. investors under Regulation S.

When do Gen Digital's (GEN) new senior notes mature?

The new senior notes are scheduled to mature in 2033.

What existing notes is Gen Digital (GEN) planning to repurchase?

Gen Digital is planning to repurchase all of its outstanding 5.00% Senior Notes due 2025.