Post Holdings Announces Commencement of Senior Secured Notes Offering

Rhea-AI Summary

Post Holdings, Inc. announced a private offering of $875.0 million in aggregate principal amount of senior secured notes due 2032. The net proceeds will be used to repay outstanding term loans, redeem existing senior notes, and pay associated fees and expenses. The offering is not conditioned upon the redemption of the 5.75% senior notes due 2027, and the final terms and amounts of the Notes are subject to market conditions.

Positive

• None.

Negative

• The offering is not conditioned upon the redemption of the 5.75% senior notes due 2027, which may impact the Company's ability to refinance its existing debt.
• The final terms and amounts of the Notes are subject to market conditions, potentially leading to different results than anticipated.

Financial Analyst

Post Holdings, Inc.'s intention to issue $875 million in senior secured notes due 2032 is a significant move aimed at optimizing the company's capital structure. By planning to repay the $400 million incremental term loan and redeeming existing 5.75% senior notes, Post is signaling a proactive approach to managing its debt obligations. This refinancing could potentially lead to a reduction in interest expenses, given that the new notes might carry a lower interest rate compared to the 5.75% notes due for redemption.

However, the success of this offering hinges on market conditions, which can be volatile. Investors should consider the impact of interest rate trends and the company's credit rating on the pricing of the new notes. Furthermore, the use of any remaining proceeds for general corporate purposes, including potential acquisitions or share repurchases, may affect the company's leverage and liquidity ratios, which are critical factors in assessing financial health.

Debt Market Analyst

The issuance of senior secured notes typically indicates a company's confidence in its ability to meet its debt obligations. Secured by the company's assets and guaranteed by its subsidiaries, these notes offer a layer of protection for investors. However, the exclusion of certain subsidiaries from the guarantee and the exemption from registration requirements limit the potential buyer pool to qualified institutional buyers and non-U.S. persons, which may affect the liquidity and marketability of the notes.

Investors should be aware of the Rule 144A and Regulation S exemptions, which allow for a more expedited process but also come with trading restrictions post-issuance. The terms of the offering and the company's ability to attract sufficient interest from these specific investor segments will be crucial in determining the ultimate cost of capital for Post Holdings.

Market Research Analyst

Post Holdings' strategic financial maneuvering must be evaluated within the broader context of the consumer goods sector and prevailing economic conditions. The company's decision to retire debt ahead of schedule could be interpreted as a move to strengthen its balance sheet in anticipation of market uncertainties or as part of a larger strategic pivot, such as increased M&A activity or capital investments.

Given the competitive landscape, Post's ability to successfully manage its debt and finance operations can provide it with a competitive edge. However, the outcome of this offering will depend on the investor perception of Post's market position and growth prospects. A successful offering could enhance investor confidence, while any deviation from expected terms or amounts could signal underlying concerns about the company's financial strategy or market conditions.

ST. LOUIS, Feb. 05, 2024 (GLOBE NEWSWIRE) -- Post Holdings, Inc. (NYSE:POST) (the “Company” or “Post”) today announced it intends to commence a private offering to eligible purchasers, subject to market and other conditions, of $875.0 million in aggregate principal amount of senior secured notes due 2032 (the “Notes”). The Notes will be secured obligations of the Company and will be guaranteed on a senior secured basis by each of the Company’s existing and subsequently acquired or organized wholly-owned domestic subsidiaries that guarantee the Company’s credit agreement or certain of its other indebtedness; however, immaterial subsidiaries, receivables finance subsidiaries and subsidiaries the Company designates as unrestricted subsidiaries will not be required to guarantee the Notes.

The Company intends to use the net proceeds from the Notes offering, together with cash on hand, for purposes of repaying in full its outstanding $400.0 million incremental term loan under its credit agreement, which the Company borrowed in April 2023, redeeming its existing 5.75% senior notes due 2027 and paying the premiums, costs, fees and expenses associated with the offering, the term loan repayment and the notes redemption. To the extent there are any remaining net proceeds, the Company intends to use such proceeds for general corporate purposes, which could include, among other things, retirement or repayment of existing debt, acquisitions, share repurchases, capital expenditures and working capital. The final terms and amounts of the Notes are subject to market and other conditions and may be materially different than expectations. The offering is not conditioned upon the consummation of the redemption of the Company’s 5.75% senior notes due 2027, which is expected to occur on March 1, 2024.

The Notes and the related subsidiary guarantees are being offered to persons reasonably believed to be qualified institutional buyers in an offering exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to non-U.S. persons outside of the United States in compliance with Regulation S under the Securities Act. The Notes and the related subsidiary guarantees have not been registered under the Securities Act, or any state securities laws, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

This press release is not an offer to sell or a solicitation of an offer to buy any security, nor shall there be any sales of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any jurisdiction. This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act. This press release is not a notice of redemption with respect to the 5.75% senior notes due 2027.

Cautionary Statement on Forward-Looking Language

Forward-looking statements, within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, are made throughout this press release, including statements regarding the anticipated terms of the Notes being offered, the completion, timing and size of the offering and the intended use of the net proceeds of the offering. These forward-looking statements are sometimes identified from the use of forward-looking words such as “believe,” “should,” “could,” “potential,” “continue,” “expect,” “project,” “estimate,” “predict,” “anticipate,” “aim,” “intend,” “plan,” “forecast,” “target,” “is likely,” “will,” “can,” “may” “would” or the negative of these terms or similar expressions elsewhere in this press release. All forward-looking statements are subject to a number of important factors, risks, uncertainties and assumptions that could cause actual results to differ materially from those described in any forward-looking statements. These factors and risks include, but are not limited to, unanticipated developments that prevent, delay or negatively impact the offering and other financial, operational and legal risks and uncertainties detailed from time to time in the Company’s cautionary statements contained in its filings with the Securities and Exchange Commission. The Company may not consummate the offering as described in this press release and, if the offering is consummated, cannot provide any assurance regarding the final terms of the offering or the Notes or its ability to effectively apply the net proceeds as described above. These forward-looking statements represent the Company’s judgment as of the date of this press release. The Company disclaims, however, any intent or obligation to update these forward-looking statements. There can be no assurance that the proposed offering will be completed as anticipated or at all.

About Post Holdings, Inc.

Post Holdings, Inc., headquartered in St. Louis, Missouri, is a consumer packaged goods holding company with businesses operating in the center-of-the-store, refrigerated, foodservice and food ingredient categories.

Contact:
Investor Relations
Daniel O’Rourke
daniel.orourke@postholdings.com 
(314) 806-3959

What is Post Holdings, Inc. announcing?

Post Holdings, Inc. is announcing a private offering of $875.0 million in senior secured notes due 2032.

How will the net proceeds from the offering be used?

The net proceeds will be used to repay outstanding term loans, redeem existing senior notes, and pay associated fees and expenses.

Is the offering conditioned upon the redemption of the 5.75% senior notes due 2027?

No, the offering is not conditioned upon the redemption of the 5.75% senior notes due 2027.

What is the regulatory status of the offering?

The offering is being made to qualified institutional buyers and non-U.S. persons in compliance with Regulation S under the Securities Act.