Stantec Announces the Closing of $425 Million Senior Unsecured Notes Offering

Rhea-AI Summary

Stantec (TSX, NYSE: STN) has successfully closed a private placement offering of $425 million in senior unsecured notes. The notes, due June 10, 2032, carry a 4.374% annual interest rate and were priced at par. DBRS Limited has assigned a BBB rating with a stable trend to the notes. The company plans to utilize the proceeds to repay existing debt and for general corporate purposes. The notes rank pari passu with Stantec's existing and future senior unsecured indebtedness and are senior to any future subordinated debt. The offering was conducted on an exempt basis from prospectus requirements in Canada and was not registered under the U.S. Securities Act.

Positive

• Successful raising of $425 million through senior unsecured notes
• Favorable BBB rating with stable trend from DBRS Limited
• Strategic debt refinancing opportunity with 7-year maturity
• Competitive 4.374% interest rate in current market conditions

Negative

• Increased debt load on company's balance sheet
• Additional interest expense of approximately $18.6 million annually

Insights

Financial Analyst

Stantec strengthens financial position with $425M note issuance at favorable 4.374% rate, demonstrating market confidence despite higher interest environment.

Stantec's successful closing of a $425 million senior unsecured notes offering represents a significant financial maneuver that strengthens the company's balance sheet structure. The 7-year notes (maturing June 2032) carry a 4.374% interest rate and were priced at par, indicating healthy investor demand despite the current higher interest rate environment.

The BBB investment-grade rating with stable outlook from DBRS Limited underscores Stantec's solid financial fundamentals and creditworthiness. This rating positions the notes firmly in the lower-medium grade category, allowing the company to secure this substantial financing without facing high-yield premiums that would increase borrowing costs.

The stated purpose of repaying existing indebtedness suggests a debt refinancing strategy that likely extends Stantec's debt maturity profile while potentially optimizing interest expenses. By terming out debt to 2032, management is locking in medium-term financing at rates that, while elevated compared to recent years, may prove advantageous if interest rates remain higher for longer.

The timing and structure of this offering demonstrate financial acumen – securing longer-term funding through private placement provides flexibility without the more stringent public disclosure requirements, while maintaining the company's ability to fund potential growth initiatives or navigate economic uncertainty. This offering reinforces Stantec's proactive approach to capital management as it continues its positioning as a global leader in sustainable engineering and consulting services.

(All financial figures are expressed in Canadian dollars)

EDMONTON, Alberta, June 10, 2025 (GLOBE NEWSWIRE) -- Stantec Inc. (“Stantec”) (TSX, NYSE: STN), a global leader in sustainable engineering, architecture and environmental consulting, announced the closing of its previously announced private placement offering (the "Offering") of $425 million aggregate principal amount of senior unsecured notes due June 10, 2032 (the "Notes"). The Notes bear an interest rate of 4.374% per annum and were priced at par.

Stantec intends to use the net proceeds of the Offering to repay existing indebtedness and for general corporate purposes.

The Notes are direct senior unsecured obligations of Stantec and rank pari passu with all of Stantec's existing and future senior unsecured indebtedness and senior in right of payment to any future subordinated indebtedness of Stantec. The Notes have been assigned a rating of BBB, with a stable trend, by DBRS Limited (Morningstar DBRS).

The Notes were not qualified for sale to the public under applicable securities laws in Canada and, accordingly, any offer and sale of the Notes in Canada was made on a basis which is exempt from the prospectus requirements of such securities laws. The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or the securities laws of any other jurisdiction, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (as such term is defined in Regulation S under the U.S. Securities Act). This news release shall not constitute an offer to sell or the solicitation of an offer to buy, any security, nor shall there be any offer to sell or a solicitation of an offer to buy the Notes in any jurisdiction where it is unlawful to do so.

About Stantec

Stantec empowers clients, people, and communities to rise to the world’s greatest challenges at a time when the world faces more unprecedented concerns than ever before.

We are a global leader in sustainable engineering, architecture, and environmental consulting. Our professionals deliver the expertise, technology, and innovation communities need to manage aging infrastructure, demographic and population changes, the energy transition, and more.

Today’s communities transcend geographic borders. At Stantec, community means everyone with an interest in the work that we do—from our project teams and industry colleagues to our clients and the people our work impacts. The diverse perspectives of our partners and interested parties drive us to think beyond what’s previously been done on critical issues like climate change, digital transformation, and future-proofing our cities and infrastructure.

We are designers, engineers, scientists, project managers, and strategic advisors. We innovate at the intersection of community, creativity, and client relationships to advance communities everywhere, so that together we can redefine what’s possible.

Stantec trades on the TSX and the NYSE under the symbol STN.

For further information:

Investor Contact
Jess Nieukerk
Stantec Investor Relations
Ph: (403) 569-5389
jess.nieukerk@stantec.com

FAQ

What is the size and interest rate of Stantec's (STN) new notes offering?

Stantec's notes offering is $425 million with an interest rate of 4.374% per annum, due June 10, 2032.

What credit rating did DBRS assign to Stantec's (STN) new notes?

DBRS Limited assigned a BBB rating with a stable trend to Stantec's notes.

How will Stantec (STN) use the proceeds from the notes offering?

Stantec intends to use the net proceeds to repay existing indebtedness and for general corporate purposes.

What is the maturity date of Stantec's (STN) new senior unsecured notes?

The senior unsecured notes will mature on June 10, 2032.

Are Stantec's (STN) new notes available for public trading?

No, the notes were offered through private placement and were not qualified for public sale under Canadian securities laws or registered under the U.S. Securities Act.