LyondellBasell Prices Public Offering of Guaranteed Notes

Rhea-AI Summary

LyondellBasell (LYB) announces a public offering of $750 million aggregate principal amount of 5.500% Guaranteed Notes due 2034 by its subsidiary. The Offering is expected to close on February 28, 2024, with net proceeds intended for general corporate purposes, including the repayment of existing senior notes. Citigroup Global Markets Inc. and Mizuho Securities USA LLC are the joint book-running managers for the Offering.

Financial Analyst

LyondellBasell's decision to issue $750 million in Guaranteed Notes with a 5.500% yield due in 2034 represents a strategic move to strengthen its capital structure. The lower interest rate compared to the 5.75% Senior Notes due in 2024 suggests a refinancing effort that could lead to interest expense savings. This is a common financial strategy, especially in an environment where interest rates may be rising and companies look to lock in lower rates before further increases. The impact on the stock market will depend on investors' perception of the company's debt management and future cash flow expectations.

From a balance sheet perspective, the use of proceeds for general corporate purposes, including the repayment of existing debt, indicates prudent financial management. However, it's important to monitor the company's leverage ratios post-issuance to assess the long-term solvency and financial health of LyondellBasell. Investors should also consider the company's credit rating and the overall industry's economic outlook when evaluating the potential risk and return of these notes.

Market Research Analyst

The chemical industry, where LyondellBasell operates, is highly capital-intensive and companies often require substantial funding for operations, expansion and technological upgrades. The issuance of Guaranteed Notes could signal confidence in LyondellBasell's future revenue streams and its ability to meet long-term obligations. The guarantee by LyondellBasell enhances the attractiveness of the notes, potentially reducing the cost of capital due to perceived lower risk.

Investors and analysts will be interested in how this capital restructuring aligns with LyondellBasell's strategic initiatives, such as investments in sustainable solutions and digital transformation. The company's ability to innovate and improve operational efficiency while managing its debt profile will be critical to its competitive position in the market. This offering could be seen as a positive move if it supports growth and value-creating projects.

Legal Expert

LyondellBasell's adherence to regulatory requirements by filing with the SEC and providing a prospectus supplement is a necessary legal step for public offerings. This transparency allows investors to make informed decisions based on detailed financial data and company plans. The legal framework governing these transactions, including the need for registration and qualification under the securities laws, is designed to protect investors and maintain market integrity.

It's also noteworthy that the company clearly states the offering is subject to customary closing conditions and jurisdictional securities laws. This indicates a recognition of the complex legal landscape in which international financing operates. The role of joint book-running managers by reputable financial institutions like Citigroup and Mizuho Securities adds a layer of credibility and ensures the offering adheres to best practices in securities law.

HOUSTON, Feb. 26, 2024 /PRNewswire/ -- LyondellBasell (NYSE: LYB) announced today that LYB International Finance III, LLC, its wholly-owned subsidiary, priced a public offering (the "Offering") of $750,000,000 aggregate principal amount of 5.500% Guaranteed Notes due 2034 (the "Notes"). The Notes will be fully and unconditionally guaranteed by LyondellBasell. The Offering is expected to close on February 28, 2024, subject to the satisfaction of customary closing conditions.

The net proceeds of the Offering are expected to be used for general corporate purposes, which may include the repayment of the 5.75% Senior Notes due 2024 issued by LyondellBasell.

Citigroup Global Markets Inc. and Mizuho Securities USA LLC are acting as the joint book-running managers for the Offering.

The Offering is being made pursuant to an effective shelf registration statement that was previously filed with the Securities and Exchange Commission (the "SEC"). A preliminary prospectus supplement has been filed, and a prospectus supplement relating to the offering of the Notes will be filed, with the SEC, to which this communication relates. Prospective investors should read the preliminary prospectus supplement and the accompanying prospectus included in the registration statement and other documents LyondellBasell has filed with the SEC relating to the Offering, copies of which may be obtained for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, copies of the preliminary prospectus supplement and the accompanying base prospectus may be obtained by calling Citigroup Global Markets Inc. at 1-800-831-9146 or Mizuho Securities USA LLC at 1-866-271-7403.

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 offer, solicitation or sale of the 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. Any offering of securities will be made only by means of a prospectus supplement, which will be filed with the SEC.

About LyondellBasell

We are LyondellBasell (NYSE: LYB) – a leader in the global chemical industry creating solutions for everyday sustainable living. Through advanced technology and focused investments, we are enabling a circular and low carbon economy. Across all we do, we aim to unlock value for our customers, investors and society. As one of the world's largest producers of polymers and a leader in polyolefin technologies, we develop, manufacture and market high-quality and innovative products for applications ranging from sustainable transportation and food safety to clean water and quality healthcare.

Forward-Looking Statements

The statements in this release relating to matters that are not historical facts are forward-looking statements. Actual results could differ materially based on factors including, but not limited to, market conditions; our ability to complete the Offering and apply the net proceeds as described; and our ability to comply with debt covenants and to amend, extend, repay, service, and reduce our debt. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the "Risk Factors" section of our Form 10-K for the year ended December 31, 2023, which can be found at www.lyondellbasell.com on the Investor Relations page and on the SEC's website at www.sec.gov.

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/lyondellbasell-prices-public-offering-of-guaranteed-notes-302071680.html

SOURCE LyondellBasell

What is the purpose of the public offering announced by LyondellBasell (LYB)?

The net proceeds of the Offering are expected to be used for general corporate purposes, including the repayment of the 5.75% Senior Notes due 2024 issued by LyondellBasell.

Who are the joint book-running managers for the Offering by LyondellBasell (LYB)?

Citigroup Global Markets Inc. and Mizuho Securities USA LLC are acting as the joint book-running managers for the Offering.

When is the expected closing date for the Offering by LyondellBasell (LYB)?

The Offering is expected to close on February 28, 2024, subject to the satisfaction of customary closing conditions.

Where can prospective investors obtain more information about the Offering by LyondellBasell (LYB)?

Prospective investors can obtain information by visiting EDGAR on the SEC website at www.sec.gov or by calling Citigroup Global Markets Inc. at 1-800-831-9146 or Mizuho Securities USA LLC at 1-866-271-7403.

Does the press release indicate any specific use of the net proceeds from the Offering by LyondellBasell (LYB)?

The net proceeds are expected to be used for general corporate purposes, including the repayment of existing senior notes.