TE Connectivity announces pricing of $900 million senior notes offerings

Rhea-AI Summary

TE Connectivity has announced the pricing of $900 million in senior notes through its subsidiary Tyco Electronics Group. The offering consists of two parts: $450 million in 4.500% senior notes due 2031 at 99.516% issue price, and $450 million in 5.000% senior notes due 2035 at 98.947% issue price. Both notes will pay interest semi-annually.

The proceeds from this offering, along with funds from a concurrent Euro notes offering, will be used for general corporate purposes, including repaying debt from the Richards Manufacturing business acquisition. The offering is expected to close on May 9, 2025.

Eight major financial institutions are serving as joint book-running managers: Barclays Capital, BNP Paribas Securities, BofA Securities, Citigroup Global Markets, Deutsche Bank Securities, Goldman Sachs, J.P. Morgan Securities, and Scotia Capital. The offering is made under an effective registration statement filed on October 1, 2024.

Positive

• Successfully priced $900M in senior notes offering across two tranches
• Secured competitive interest rates (4.5% for 2031 notes, 5% for 2035 notes)
• Strong banking syndicate including major institutions supporting the offering
• Proceeds will help refinance debt from Richards Manufacturing acquisition, indicating strategic growth

Negative

• Notes issued at slight discount (99.516% and 98.947% of face value)
• Taking on substantial new debt ($900M) which increases leverage
• Higher interest expense with semi-annual payments required on both note series

Insights

Financial Analyst

TE Connectivity secures $900M in senior notes to refinance acquisition debt, demonstrating strong market access while managing its debt maturity profile.

TE Connectivity's subsidiary TEGSA has successfully priced $900 million in senior notes split between two tranches: $450 million of 4.500% notes due 2031 and $450 million of 5.000% notes due 2035. The pricing structure shows a slight discount to par value (99.516% and 98.947% respectively), which is standard for the fixed income market and reflects current interest rate conditions.

The company has explicitly stated these funds will be used for general corporate purposes, including repaying debt incurred during the acquisition of Richards Manufacturing. This refinancing approach represents prudent capital management by potentially replacing short-term acquisition financing with longer-dated fixed-rate debt, which helps extend the company's debt maturity profile and reduce refinancing risk.

The involvement of eight major financial institutions as joint book-running managers (including Barclays, JPMorgan, Goldman Sachs, and BofA Securities) signals strong market reception for this offering. The mention of a concurrent Euro notes offering, though without specified amounts, suggests TE Connectivity is diversifying its debt portfolio across currencies, which can provide natural hedging benefits for a global operation.

This transaction demonstrates TE Connectivity maintains solid access to capital markets, allowing it to optimize its financing structure while supporting strategic acquisitions. With a definitive closing timeline (May 9, 2025), the company provides clarity on the execution of this financial maneuver.

GALWAY, Ireland, April 29, 2025 /PRNewswire/ -- TE Connectivity plc (NYSE: TEL) ("TE Connectivity") today announced that Tyco Electronics Group S.A. ("TEGSA"), its indirect wholly-owned subsidiary, has priced an offering of:

• $450 million aggregate principal amount of its 4.500% senior notes due 2031.
• $450 million aggregate principal amount of its 5.000% senior notes due 2035.

The offer is being made pursuant to an effective registration statement filed by TE Connectivity, TE Connectivity Switzerland Ltd. and TEGSA on October 1, 2024, which includes a prospectus, and a prospectus supplement dated April 29, 2025.

The $450 million senior notes due 2031 will be issued at a price of 99.516% and will have a stated interest rate of 4.500% per year, payable semi-annually. The $450 million senior notes due 2035 will be issued at a price of 98.947% and will have a stated interest rate of 5.000% per year, payable semi-annually.

TE Connectivity intends to use the net proceeds of this offering, together with any net proceeds received from the concurrent Euro notes offering, for general corporate purposes, including the repayment of debt incurred in connection with the acquisition of the Richards Manufacturing business.

Barclays Capital Inc., BNP Paribas Securities Corp., BofA Securities, Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Scotia Capital (USA) Inc. are joint book-running managers for this offering, which is expected to close on May 9, 2025.

A copy of the base prospectus in the registration statement or the prospectus supplement for the offering can be obtained from the Securities and Exchange Commission's website at www.sec.gov or by calling Barclays Capital Inc. toll free at 1-888-603-5847, BNP Paribas Securities Corp. toll free at 1-800-854-5674, BofA Securities, Inc. toll free at 1-800-294-1322, Citigroup Global Markets Inc. toll free at 1-800-831-9146, Deutsche Bank Securities Inc. toll free at 1-800-503-4611, Goldman Sachs & Co. LLC toll free at 1-866-471-2526, J.P. Morgan Securities LLC collect at 1-212-834-4533 or Scotia Capital (USA) Inc. at 1-800-372-3930.

This announcement does not constitute an offer to sell or the solicitation of offers to buy any security and shall not constitute an offer, solicitation, or sale of any security in any jurisdiction in which such offer, solicitation, or sale would be unlawful.

About TE Connectivity

TE Connectivity plc (NYSE: TEL) is a global industrial technology leader creating a safer, sustainable, productive, and connected future. Our broad range of connectivity and sensor solutions enable the distribution of power, signal and data to advance next-generation transportation, energy networks, automated factories, data centers, medical technology and more. With more than 85,000 employees, including 9,000 engineers, working alongside customers in approximately 130 countries, TE ensures that EVERY CONNECTION COUNTS.

Forward-Looking Statements

This release contains certain "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to risks, uncertainties and changes in circumstances, which may cause actual results, performance, financial condition or achievements to differ materially from anticipated results, performance, financial condition or achievements. All statements contained herein that are not clearly historical in nature are forward-looking and the words "anticipate," "believe," "expect," "estimate," "plan," and similar expressions are generally intended to identify forward-looking statements. We have no intention and are under no obligation to update or alter (and expressly disclaim any such intention or obligation to do so) our forward-looking statements whether as a result of new information, future events or otherwise, except to the extent required by law. The forward-looking statements in this release include statements regarding the notes offering. Examples of factors that could cause actual results to differ materially from those described in the forward-looking statements include, among others, the extent, severity and duration of business interruptions negatively affecting our business operations; business, economic, competitive and regulatory risks, such as conditions affecting demand for products in the automotive and other industries we serve; competition and pricing pressure; fluctuations in foreign currency exchange rates and impacts of offsetting hedges; natural disasters and political, economic and military instability in countries in which we operate, including the continuing military conflicts in certain parts of the world; developments in the credit markets; future goodwill impairment; compliance with current and future environmental and other laws and regulations; and the possible effects on us of changes in tax laws, tax treaties and other legislation, including the effects of Irish tax reform (if applicable). More detailed information about these and other factors is set forth in TE Connectivity plc's Annual Report on Form 10-K for the fiscal year ended Sept. 27, 2024 as well as in our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports filed by us with the U.S. Securities and Exchange Commission.

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SOURCE TE Connectivity plc

FAQ

What are the terms of TE Connectivity's (TEL) $900M senior notes offering in 2025?

TE Connectivity is offering two sets of senior notes: $450M at 4.500% due 2031 (issued at 99.516%) and $450M at 5.000% due 2035 (issued at 98.947%). Both notes will pay interest semi-annually.

How will TE Connectivity (TEL) use the proceeds from its 2025 bond offering?

TE Connectivity will use the net proceeds from this offering, along with proceeds from a concurrent Euro notes offering, for general corporate purposes, including repaying debt from the Richards Manufacturing business acquisition.

When will TE Connectivity's (TEL) 2025 senior notes offering close?

The senior notes offering is expected to close on May 9, 2025.

Which banks are managing TE Connectivity's (TEL) 2025 bond offering?

The joint book-running managers are Barclays Capital, BNP Paribas Securities, BofA Securities, Citigroup Global Markets, Deutsche Bank Securities, Goldman Sachs, J.P. Morgan Securities, and Scotia Capital.

What interest rates is TE Connectivity (TEL) offering on its 2025 senior notes?

TE Connectivity is offering 4.500% interest rate on the 2031 notes and 5.000% interest rate on the 2035 notes, both payable semi-annually.