ADP Announces Pricing of its Senior Notes Due 2034

Rhea-AI Summary

ADP (Nasdaq: ADP), a leading global technology company providing human capital management solutions, has announced the pricing of a public offering of $1.0 billion aggregate principal amount of 4.450% senior notes due 2034. The company expects to receive the net offering proceeds on or around September 9, 2024. ADP intends to use the proceeds for general corporate purposes.

The company has filed a registration statement with the SEC for this offering. Interested investors are advised to read the base prospectus, applicable preliminary prospectus supplement, and other relevant documents filed with the SEC for comprehensive information about ADP and the offering. These documents are available for free on the SEC website or can be obtained upon request from the underwriters.

Positive

• Successful pricing of $1.0 billion senior notes offering
• 4.450% interest rate secured for 10-year notes
• Strengthening of ADP's financial position through debt issuance

Negative

• Increase in long-term debt obligations
• Potential impact on future interest expenses

Insights

Financial Analyst

ADP's decision to issue $1 billion in senior notes at a 4.450% interest rate is a strategic move to capitalize on the current market conditions. This long-term debt, maturing in 2034, allows ADP to lock in a relatively favorable interest rate for an extended period. The timing suggests ADP sees potential for rising interest rates in the future. The use of proceeds for 'general corporate purposes' provides financial flexibility, potentially funding growth initiatives, refinancing existing debt, or enhancing shareholder returns. However, investors should monitor how this additional debt impacts ADP's balance sheet and future interest expenses. The successful pricing of these notes indicates strong investor confidence in ADP's long-term financial stability and market position in the HCM solutions sector.

Market Research Analyst

ADP's bond offering reflects broader market trends in the tech sector. As a leading HCM solutions provider, ADP's ability to secure $1 billion in long-term financing at 4.450% demonstrates investor confidence in the company's future and the overall stability of the HCM market. This move could signal ADP's intentions to expand its market share or invest in new technologies, potentially through acquisitions or R&D. The tech industry, particularly in B2B services, is seeing increased competition and rapid innovation. ADP's financial maneuver suggests they're positioning themselves to stay competitive and potentially outpace rivals. Investors should watch for upcoming announcements on how ADP plans to utilize this capital to drive growth and maintain its market leadership.

ROSELAND, N.J., Sept. 5, 2024 /PRNewswire/ -- ADP (Nasdaq: ADP), a leading global technology company providing human capital management (HCM) solutions, today announced the pricing of a public offering of $1.0 billion aggregate principal amount of its 4.450% senior notes due 2034.

ADP expects to receive the net offering proceeds upon closing on or about September 9, 2024. The intended use of proceeds from the offering is for general corporate purposes.

ADP has filed a registration statement (including a prospectus and preliminary prospectus supplement) with the Securities and Exchange Commission ("SEC") for the offering to which this communication relates. Before you invest, you should read the base prospectus in that registration statement, the applicable preliminary prospectus supplement and the other documents ADP has filed with the SEC for more complete information about ADP and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, ADP, any underwriter or any dealer participating in the offering will arrange to send investors the prospectus and preliminary prospectus supplement upon request by contacting BofA Securities, Inc. by telephone at 1-800-294-1322 or by email at dg.prospectus_requests@bofa.com, J.P. Morgan Securities LLC by telephone (collect) at (212) 834-4533 or Morgan Stanley & Co. LLC by telephone at (866) 718-1649.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the debt securities or any other securities, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The offering of these securities may be made only by means of the prospectus supplement and the accompanying prospectus.

About ADP (NASDAQ – ADP)
Designing better ways to work through cutting-edge products, premium services and exceptional experiences that enable people to reach their full potential.  HR, Talent, Time Management, Benefits and Payroll.  Informed by data and designed for people. 

Forward-Looking Statements
This document and other written or oral statements made from time to time by ADP may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature and which may be identified by the use of words like "outlook," "expects," "assumes," "projects," "anticipates," "estimates," "we believe," "could," "is designed to" and other words of similar meaning, are forward-looking statements. These statements are based on management's expectations and assumptions and depend upon or refer to future events or conditions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed. Forward-looking statements are subject to inherent risks and uncertainties. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements or that could contribute to such difference include: ADP's success in obtaining and retaining clients, and selling additional services to clients; the pricing of products and services; the success of our new solutions; our ability to respond successfully to changes in technology, including artificial intelligence; compliance with existing or new legislation or regulations; changes in, or interpretations of, existing legislation or regulations; overall market, political and economic conditions, including interest rate and foreign currency trends and inflation; competitive conditions; our ability to maintain our current credit ratings and the impact on our funding costs and profitability; security or cyber breaches, fraudulent acts, and system interruptions and failures; employment and wage levels; availability of skilled associates; the impact of new acquisitions and divestitures; the adequacy, effectiveness and success of our business transformation initiatives; the impact of any uncertainties related to major natural disasters or catastrophic events; and supply-chain disruptions. The factors identified above are not exhaustive. ADP disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. These risks and uncertainties, along with the risk factors discussed under "Item 1A. - Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, and in other written or oral statements made from time to time by ADP, should be considered in evaluating any forward-looking statements contained herein.

ADP, the ADP logo, and Always Designing for People are trademarks of ADP, Inc. All other marks are the property of their respective owners.  

Copyright © 2024 ADP, Inc. All rights reserved.

ADP-Media

Contact:
Allyce Hackmann
201.400.4583
Allyce.Hackmann@adp.com

ADP-Investor Relations

Contact:
ADP Investor Relations
Matthew Keating, CFA
973.974.3037
Matthew.Keating@adp.com

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SOURCE ADP - IR

FAQ

What is the size and interest rate of ADP's new senior notes offering?

ADP (Nasdaq: ADP) has priced a public offering of $1.0 billion aggregate principal amount of 4.450% senior notes due 2034.

When does ADP expect to receive the proceeds from the senior notes offering?

ADP expects to receive the net offering proceeds on or about September 9, 2024.

How does ADP plan to use the proceeds from the senior notes offering?

ADP intends to use the proceeds from the offering for general corporate purposes.

Where can investors find more information about ADP's senior notes offering?

Investors can access detailed information about the offering through the SEC website at www.sec.gov or by contacting the underwriters: BofA Securities, J.P. Morgan Securities, or Morgan Stanley & Co.