Unisys Announces Proposed $700 Million Private Offering of Senior Secured Notes; Net Proceeds to Refinance Existing Notes and Partially Fund U.S. Pension Plan

Rhea-AI Summary

Unisys Corporation (NYSE: UIS) has announced plans to offer $700 million in Senior Secured Notes through a private offering to qualified institutional buyers. The company will use the proceeds to refinance its existing $485 million 6.875% Senior Secured Notes due 2027, fund pension deficit and postretirement liabilities, and support general corporate purposes. Concurrently, Unisys launched a cash tender offer to purchase all outstanding existing notes and is seeking consent to modify the existing indenture terms. The new Senior Secured Notes will be guaranteed by Unisys' material domestic subsidiaries and secured by liens on substantially all assets of Unisys and the subsidiary guarantors. The offering is subject to market conditions and various other requirements, and the notes have not been registered under the Securities Act.

Positive

• New $700 million offering provides significant capital for debt refinancing and pension funding
• Restructuring of debt terms through elimination of restrictive covenants and modification of provisions
• Strong security backing with liens on substantially all assets and subsidiary guarantees
• Strategic move to address long-term pension deficit and postretirement liabilities

Negative

• Increased debt burden with new $700 million notes offering
• Additional security liens on company assets could limit future financing flexibility
• Potential impact on financial leverage and interest expenses
• Existing noteholders may face changes in their security terms and covenants

Insights

Corporate Finance Specialist

Unisys's $700M debt refinancing and pension funding plan shows improved borrowing capacity while managing long-term obligations.

Unisys is executing a comprehensive debt refinancing strategy with this $700 million senior secured notes offering. The transaction serves multiple strategic purposes: replacing $485 million of existing 6.875% notes due 2027, funding a portion of the company's pension deficit, and providing additional capital for general corporate purposes.

The structure of this refinancing reveals important financial considerations. First, by tendering for existing notes and seeking consent to eliminate restrictive covenants, Unisys is likely creating more financial flexibility. The new notes will be secured by essentially all company assets with liens subordinated to their ABL facility, indicating a continued strong commitment to creditor protection while potentially obtaining more favorable terms.

Most notably, using a portion of the proceeds to fund long-term pension deficits represents strategic liability management. Many established technology companies face significant pension obligations that can strain future cash flows. By proactively addressing these obligations now, Unisys may be reducing future financial pressure and volatility in its funding requirements.

The fact that Unisys can issue $700 million in secured debt (versus the $485 million in existing notes) suggests lenders view the company's credit capacity favorably. However, the increased debt load should be evaluated against the benefits of pension deficit reduction and potentially improved interest rates in the new issuance. The transaction represents a delicate balance between optimizing capital structure and addressing long-term obligations.

BLUE BELL, Pa., June 11, 2025 /PRNewswire/ -- Unisys Corporation (NYSE: UIS) ("Unisys") today announced its intention to offer, subject to market and other conditions, $700 million aggregate principal amount of its Senior Secured Notes (the "Senior Secured Notes") through a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A and to certain persons outside of the United States pursuant to Regulation S, each under the Securities Act of 1933, as amended (the "Securities Act"). Concurrently with the commencement of this offering, Unisys commenced a cash tender offer (the "Tender Offer") to purchase any and all of its outstanding $485 million aggregate principal amount of 6.875% Senior Secured Notes due November 1, 2027 (the "Existing Notes"). In connection with the Tender Offer, Unisys is also soliciting consents with respect to the Existing Notes in order to amend the existing indenture governing the terms of the Existing Notes to eliminate substantially all restrictive covenants and certain events of default applicable to the Existing Notes, release the collateral securing the Existing Notes and modify certain other provisions contained in the indenture (collectively with the Tender Offer, the "Tender Offer and Consent Solicitation").

Unisys intends to use the net proceeds from the offering of the Senior Secured Notes, together with cash on hand, to finance the Tender Offer and Consent Solicitation and the payment of related premiums, fees and expenses, to redeem the Existing Notes that remain outstanding following the Tender Offer and Consent Solicitation on or after the par call date for the Existing Notes, to fund a portion of its long-term pension deficit and postretirement liabilities and for general corporate purposes.

The Senior Secured Notes will be guaranteed on a senior secured basis by material domestic subsidiaries of Unisys (the "subsidiary guarantors") on the issue date and, in the future, will be guaranteed by each U.S. domestic subsidiary that guarantees the company's ABL credit facility and by each restricted subsidiary that guarantees or becomes obligated as a co-issuer or co-borrower of certain capital markets debt issued or borrowed by Unisys or any subsidiary guarantor. The Senior Secured Notes and the guarantees will be secured by liens on substantially all assets of Unisys and the subsidiary guarantors (including a pledge of 100% of the capital stock of each first tier domestic and foreign subsidiary of Unisys and the subsidiary guarantors), which liens will be subordinated to the liens on ABL collateral in favor of the ABL secured parties, subject to certain limitations and permitted liens.

The Senior Secured Notes have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements of the Securities Act or the securities laws of any other jurisdiction.

The Tender Offer and Consent Solicitation is subject to the satisfaction or waiver of various conditions, including the consummation of the offering of Senior Secured Notes, with net proceeds in an amount that, together with cash on hand and borrowings under our ABL Credit Facility, is sufficient to consummate the Tender Offer and Consent Solicitation, and other customary conditions.

This press release is neither an offer to sell nor a solicitation of an offer to buy any of these securities nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

This press release is not an offer to purchase, or soliciting consent with respect to, any of the Existing Notes. Any such offer or solicitation is made exclusively by, and subject to the conditions set forth in, the offer to purchase and consent solicitation statement.

About Unisys
Unisys is a global technology solutions company that powers breakthroughs for the world's leading organizations. Our solutions – cloud, AI, digital workspace, logistics and enterprise computing – help our clients challenge the status quo and unlock their full potential. To learn how we have been helping clients push what's possible for more than 150 years, visit unisys.com and follow us on LinkedIn.  

Forward-Looking Statements
Any statements contained in this release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding the completion by Unisys of the offering, the anticipated principal amount of securities sold, the final terms of the offering and the anticipated use of proceeds by Unisys. These forward-looking statements are based on current assumptions, expectations and beliefs of Unisys and involve substantial risks and uncertainties that may cause actual results and the timing of events to materially differ from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, risks related to market and other general economic conditions, the ability of Unisys to meet the closing conditions required for the consummation of the offering and other risks detailed in filings Unisys makes with the SEC from time to time, including under the heading "Risk Factors" in Unisys' Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and its most recent Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. Unisys assumes no obligation to update any forward-looking statements.

RELEASE NO.: 0611/10002

Unisys and other Unisys products and services mentioned herein, as well as their respective logos, are trademarks or registered trademarks of Unisys Corporation. Any other brand or product referenced herein is acknowledged to be a trademark or registered trademark of its respective holder.

UIS-C

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SOURCE Unisys Corporation

FAQ

What is the size of Unisys (UIS) new Senior Secured Notes offering?

Unisys is offering $700 million aggregate principal amount of Senior Secured Notes through a private offering to qualified institutional buyers.

How will Unisys use the proceeds from the $700M notes offering?

The proceeds will be used to refinance existing $485M notes, fund pension deficit and postretirement liabilities, and for general corporate purposes.

What security backing is provided for the new UIS Senior Secured Notes?

The notes will be guaranteed by material domestic subsidiaries and secured by liens on substantially all assets of Unisys and subsidiary guarantors.

What changes are proposed to the existing 6.875% Notes due 2027?

Unisys is seeking to eliminate restrictive covenants, certain events of default, release collateral securing the notes, and modify other indenture provisions.

Will the new Unisys notes be registered under the Securities Act?

No, the Senior Secured Notes have not been registered under the Securities Act and may not be offered or sold in the US without registration or exemption.