AppLovin Corporation Prices $3.55 Billion Offering of Senior Notes

Rhea-AI Summary

AppLovin (NASDAQ: APP) has priced a $3.55 billion senior notes offering, consisting of four tranches: $1 billion of 5.125% notes due 2029, $1 billion of 5.375% notes due 2031, $1 billion of 5.500% notes due 2034, and $550 million of 5.950% notes due 2054. The company plans to use the proceeds to repay its senior secured term loan facilities due 2028 and 2030, with any remaining funds allocated for general corporate purposes. The notes will be senior unsecured obligations without subsidiary guarantees, with the offering expected to close on December 5, 2024.

Positive

• Successful pricing of a large $3.55 billion debt offering
• Debt restructuring from secured to unsecured obligations
• Staggered maturity dates reducing refinancing risk

Negative

• Significant debt burden with $3.55 billion in new notes
• Higher interest rates ranging from 5.125% to 5.950%
• Long-term financial obligations extending up to 2054

Insights

Financial Analyst

The $3.55 billion senior notes offering represents a significant refinancing move, replacing existing secured debt with unsecured notes at varying maturities (2029-2054) and fixed interest rates ranging from 5.125% to 5.950%. This debt restructuring improves financial flexibility by removing security requirements and extending maturity dates. The staggered maturity structure helps manage refinancing risk.

The pricing and strong underwriter lineup (JPMorgan, BofA, Morgan Stanley) indicates robust market confidence in AppLovin's credit profile. The transition from secured to unsecured debt suggests improved creditworthiness, though it comes with slightly higher interest rates. This refinancing provides more operational freedom without significantly impacting the company's debt service costs.

Market Research Analyst

This refinancing aligns with AppLovin's strategic positioning in the mobile app and gaming technology sector. The successful placement of unsecured notes, especially the long-dated 2054 tranche, demonstrates strong institutional investor confidence in the company's long-term business model. The diverse maturity profile and fixed rates provide predictable debt service costs, important for maintaining stable cash flow planning in the volatile tech sector.

The timing of this offering is strategic, taking advantage of the current market conditions before potential rate changes. The removal of secured debt covenants enhances operational flexibility for future strategic initiatives and M&A opportunities.

PALO ALTO, Calif.--(BUSINESS WIRE)-- AppLovin Corporation (NASDAQ: APP) (the “Company”) announced today the pricing of its public offering of $3.55 billion aggregate principal amount of senior notes consisting of $1,000 million aggregate principal amount of 5.125% Senior Notes due 2029 (the “2029 Notes”), $1,000 million aggregate principal amount of 5.375% Senior Notes due 2031 (the “2031 Notes”), $1,000 million aggregate principal amount of 5.500% Senior Notes due 2034 (the “2034 Notes”) and $550 million aggregate principal amount of 5.950% Senior Notes due 2054 (the “2054 Notes” and, collectively with the 2029 Notes, the 2031 Notes and the 2034 Notes, the “Notes”). The offering is being made by means of an underwritten public offering pursuant to an effective registration statement filed with the Securities and Exchange Commission (the “SEC”). The Company intends to use the net proceeds of the offering of the Notes to repay in full its senior secured term loan facility due 2028 and its senior secured term loan facility due 2030 and, to the extent of any remaining net proceeds, for general corporate purposes. The Company expects to close the sale of the Notes on December 5, 2024, subject to the satisfaction of customary closing conditions.

The Notes will be senior unsecured obligations of the Company and will not be guaranteed by any of its subsidiaries.

J.P. Morgan Securities LLC, BofA Securities, Inc. and Morgan Stanley & Co. LLC are acting as joint lead book-running managers for the offering. Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC are also acting as joint book-running managers for the offering. BNP Paribas Securities Corp., MUFG Securities Americas Inc. and Scotia Capital (USA) Inc. are acting as co-managers for the offering.

The offering of Notes is being made pursuant to an effective shelf registration on Form S-3 that has previously been filed with the SEC and became automatically effective on June 1, 2023. A prospectus supplement and accompanying base prospectus related to the offering has been or will be filed with the SEC and may be found on its website at www.sec.gov. Copies of the prospectus supplement and related prospectus for the offering may be obtained from any of the joint lead book-running managers at: J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York, 10179, Attention: Investment Grade Syndicate Desk, 3rd Floor, telephone collect at 1-212-834-4533; BofA Securities, Inc., NC1-022-02-25, 201 North Tryon Street, Charlotte, NC 28255-0001, Attn: Prospectus Department, email: dg.prospectus_requests@bofa.com or by telephone 1-800-294-1322; or Morgan Stanley & Co. LLC, 180 Varick Street, New York, N.Y. 10014, Attention: Prospectus Department, by email: prospectus@morganstanley.com or by calling 1-866-718-1649.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities law of any such state or jurisdiction.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements in this release include, but are not limited to, whether or not the Company will consummate the offering of Notes and the anticipated use of proceeds of the offering of Notes. These forward-looking statements are subject to risks and uncertainties, including the risks described in the preliminary prospectus supplement, the accompanying bases prospectus, our Annual Report on Form 10-K for the fiscal year ending December 31, 2023, our Quarterly Reports on Form 10-Q for the periods ended March 31, 2024, June 30, 2024 and September 30, 2024. The forward-looking statements in this press release are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward-looking statements, except as required by law.

About AppLovin

AppLovin makes technologies that help businesses of every size connect to their ideal customers. The company provides end-to-end software and AI solutions for businesses to reach, monetize and grow their global audiences.

Source: AppLovin Corp.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241120661364/en/

Investors

David Hsiao

ir@applovin.com

Press

Kim Hughes

press@applovin.com

Source: AppLovin Corp.

FAQ

What is the total value of AppLovin's (APP) senior notes offering in December 2024?

AppLovin's senior notes offering totals $3.55 billion, comprising four tranches of different maturities and interest rates.

What are the interest rates for AppLovin's (APP) different note tranches?

The notes have varying interest rates: 5.125% for 2029 notes, 5.375% for 2031 notes, 5.500% for 2034 notes, and 5.950% for 2054 notes.

How will AppLovin (APP) use the proceeds from the senior notes offering?

AppLovin will use the proceeds to repay its senior secured term loan facilities due 2028 and 2030, with any remaining funds for general corporate purposes.

When is the expected closing date for AppLovin's (APP) notes offering?

The notes offering is expected to close on December 5, 2024, subject to customary closing conditions.