Post Holdings Announces Pricing of Senior Secured Notes Offering

Rhea-AI Summary

Post Holdings, Inc. announced the pricing of $1,000.0 million in senior notes due 2032, representing an increase from the original offering size of $875.0 million. The offering is expected to close on February 20, 2024, and the net proceeds will be used to repay outstanding loans, redeem existing senior notes, and for general corporate purposes. The Notes and the related subsidiary guarantees are being offered to qualified institutional buyers and non-U.S. persons.

Financial Analyst

The pricing of Post Holdings' senior notes offering reflects a strategic financial maneuver intended to optimize the company's capital structure. The upsizing from an original $875 million to $1 billion suggests strong market demand and investor confidence in Post's creditworthiness. This is a significant capital raise and the 6.250% interest rate indicates the market's assessment of the risk associated with Post's debt. The rate is notably higher than the existing 5.75% notes, which may imply a perceived increased risk or a reflection of the current interest rate environment.

From a financial perspective, the use of proceeds to repay the $400 million incremental term loan and redeem the existing senior notes due 2027 could improve Post's debt maturity profile and potentially reduce interest expenses in the long run. However, investors should monitor the impact of the new debt on the company's leverage ratios and interest coverage, especially considering the higher interest rate on the new notes.

Market Research Analyst

The decision by Post Holdings to secure the new offering with guarantees from its subsidiaries, excluding certain entities, provides a layer of security for investors, which could be a contributing factor to the increased offering size. This structuring detail reflects the company's strategic approach to balance sheet management, ensuring a broad base of assets to back the debt issuance.

Moreover, the allocation of any remaining proceeds for general corporate purposes, including potential acquisitions and share repurchases, indicates that Post is looking to maintain strategic flexibility. Investors should consider how these activities could drive growth or shareholder value, while also being cognizant of the potential risks associated with increased corporate debt levels.

Legal Expert

The offering's exemption from registration under Rule 144A and compliance with Regulation S highlights the regulatory intricacies of securities offerings. The targeted approach to qualified institutional buyers and non-U.S. persons suggests an understanding of the legal framework to maximize the offering's reach while adhering to securities laws.

Investors should note the legal stipulations that the notes, unless registered, cannot be sold in the U.S. except under specific exemptions. This legal boundary defines the liquidity and marketability of the notes, potentially affecting their attractiveness to certain investors. The careful navigation of these regulations by Post Holdings is indicative of their diligence in executing corporate finance transactions.

ST. LOUIS, Feb. 05, 2024 (GLOBE NEWSWIRE) -- Post Holdings, Inc. (NYSE:POST) (the “Company” or “Post”) today announced the pricing of its previously announced senior notes offering. The Company priced $1,000.0 million in aggregate principal amount of 6.250% senior notes due 2032 at par (the “Notes”), representing an increase from the original offering size of $875.0 million. The Notes offering is expected to close on February 20, 2024, subject to customary closing conditions. 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 offering is not conditioned upon the consummation of the redemption of the 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 completion of the offering, timing and the expected amount and 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 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 assurances regarding 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 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 the aggregate principal amount of the senior notes offered by Post Holdings, Inc.?

Post Holdings, Inc. priced $1,000.0 million in aggregate principal amount of 6.250% senior notes due 2032 at par.

When is the expected closing date of the Notes offering?

The Notes offering is expected to close on February 20, 2024, subject to customary closing conditions.

What will the net proceeds from the Notes offering be used for?

The net proceeds from the Notes offering will be used to repay in full the outstanding $400.0 million incremental term loan, redeem existing senior notes, and for general corporate purposes.

Who are the Notes and the related subsidiary guarantees being offered to?

The Notes and the related subsidiary guarantees are being offered to qualified institutional buyers in an offering exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended, and to non-U.S. persons outside of the United States in compliance with Regulation S under the Securities Act.