Aptiv Announces Pricing of Senior Notes and Fixed-to-Fixed Reset Rate Junior Subordinated Notes

Rhea-AI Summary

Aptiv PLC (NYSE: APTV) has announced the pricing of $2.15 billion in notes, including $1.65 billion in Senior Notes and $500 million in Subordinated Notes. The offerings comprise:

- $550 million of 4.650% Senior Notes due 2029
- $550 million of 5.150% Senior Notes due 2034
- $550 million of 5.750% Senior Notes due 2054
- $500 million of 6.875% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due 2054

The notes will be co-issued by Aptiv PLC and Aptiv Global Financing Designated Activity Company, guaranteed by Aptiv Proceeds will be used to redeem 2.396% senior notes due 2025 and repay outstanding bridge loans. The offerings are expected to close on September 13, 2024, subject to customary conditions.

Positive

• Successful pricing of $2.15 billion in notes, indicating strong investor interest
• Diversified debt structure with varying maturities (2029, 2034, 2054)
• Potential improvement in debt profile by redeeming 2025 notes and repaying bridge loans

Negative

• Increase in long-term debt obligations
• Higher interest rates on new notes compared to the 2.396% notes being redeemed

Insights

Financial Analyst

Aptiv's pricing of $2.15 billion in senior and subordinated notes is a significant financial move. The company's ability to secure this funding at relatively competitive rates (4.65% to 6.875%) suggests strong market confidence. This debt issuance allows Aptiv to refinance existing obligations and potentially improve its debt structure. However, investors should note the increased interest expense, which could impact profitability. The long-term nature of these notes (up to 30 years) provides Aptiv with extended financial flexibility but also represents a long-term commitment. Overall, this move strengthens Aptiv's financial position, potentially supporting future growth initiatives in the evolving mobility technology sector.

Market Research Analyst

This debt offering reflects Aptiv's strategic positioning in the rapidly evolving mobility technology market. The company's focus on safer, greener and more connected mobility aligns with major industry trends, potentially justifying investor confidence. The successful pricing of these notes, especially in the current economic climate, indicates strong market interest in Aptiv's long-term prospects. However, the mobility sector faces challenges including regulatory changes, technological disruptions and intense competition. Investors should consider how Aptiv plans to utilize this capital to maintain its competitive edge and drive innovation in key areas such as autonomous driving, electrification and connected vehicle technologies.

Legal Expert

The structure of this debt offering is noteworthy from a legal perspective. The co-issuance by Aptiv PLC and its indirect subsidiary, along with the guarantee by Aptiv , creates a complex legal framework. This structure likely aims to optimize tax efficiency and provide additional security for noteholders. The use of both senior and junior subordinated notes also establishes a clear hierarchy of debt, which could be significant in potential future restructuring scenarios. Investors should be aware of the different legal standings of these notes and their implications. The mention of an effective shelf registration with the SEC indicates compliance with regulatory requirements, providing a level of assurance to potential investors.

DUBLIN--(BUSINESS WIRE)-- Aptiv PLC (NYSE: APTV) (the “Company”), a global technology company focused on making mobility safer, greener and more connected, today announced it priced $550 million principal amount of 4.650% Senior Notes due 2029 (the “2029 Notes”), $550 million principal amount of 5.150% Senior Notes due 2034 (the “2034 Notes”), $550 million principal amount of 5.750% Senior Notes due 2054 (the “2054 Notes” and, together with the 2029 Notes and 2034 Notes, the “Senior Notes”) and $500 million principal amount of 6.875% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due 2054 (the “Subordinated Notes” and, together with the Senior Notes, the “Notes”). The Notes will be co-issued by the Company and Aptiv Global Financing Designated Activity Company, an indirect subsidiary of the Company (together with the Company, the “Issuers”), and will be guaranteed by Aptiv Corporation, an indirect subsidiary of the Company.

The 2029 Notes will be issued at a price of 99.912% of the principal amount, the 2034 Notes will be issued at a price of 99.768% of the principal amount, the 2054 Notes will be issued at a price of 99.476% of the principal amount and the Subordinated Notes will be issued at a price of 100% of the principal amount. The net proceeds from the Notes will be used to redeem in full the Company’s 2.396% senior notes due 2025 and, together with cash on hand, to repay the loans outstanding under that certain Bridge Credit Agreement dated August 1, 2024, by and among the Company and certain of its subsidiaries, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto. The concurrent offerings of the Senior Notes and the Subordinated Notes are expected to close on September 13, 2024, subject to customary closing conditions. This press release does not constitute a notice of redemption.

J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC are joint book-running managers for the concurrent offerings of the Senior Notes and the Subordinated Notes.

The concurrent offerings of the Senior Notes and the Subordinated Notes are each made only by means of a prospectus. Copies may be obtained for each of the Senior Notes and the Subordinated Notes by contacting (1) J.P. Morgan Securities LLC at 1-212-834-4533 or (2) Goldman Sachs & Co. LLC at 1-866-471-2526. The Senior Notes and Subordinated Notes are each being offered pursuant to an effective shelf registration statement filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 1, 2024.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the Notes, nor will there be any sale of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful. Any offer, solicitation or sale of the Notes will be made only by means of the applicable prospectus supplement and the accompanying prospectus.

About Aptiv

Aptiv is a global technology company that develops safer, greener and more connected solutions enabling a more sustainable future of mobility.

Forward-Looking Statements

This press release, as well as other statements made by Aptiv PLC (the “Company”), contain forward-looking statements that reflect, when made, the Company’s current views with respect to current events, the proposed offerings of the Notes, certain investments and acquisitions and financial performance. Such forward-looking statements are subject to many risks, uncertainties and factors relating to the Company’s operations and business environment, which may cause the actual results of the Company to be materially different from any future results, express or implied, by such forward-looking statements. All statements that address future operating, financial or business performance or the Company’s strategies or expectations are forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: global and regional economic conditions, including conditions affecting the credit market; global inflationary pressures; uncertainties created by the conflict between Ukraine and Russia, and its impacts to the European and global economies and our operations in each country; uncertainties created by the conflicts in the Middle East and their impacts on global economies; fluctuations in interest rates and foreign currency exchange rates; the cyclical nature of global automotive sales and production; the potential disruptions in the supply of and changes in the competitive environment for raw material and other components integral to the Company’s products, including the ongoing semiconductor supply shortage; the Company’s ability to maintain contracts that are critical to its operations; potential changes to beneficial free trade laws and regulations, such as the United States-Mexico-Canada Agreement; changes to tax laws; future significant public health crises; the ability of the Company to integrate and realize the expected benefits of recent transactions; the ability of the Company to attract, motivate and/or retain key executives; the ability of the Company to avoid or continue to operate during a strike, or partial work stoppage or slow down by any of its unionized employees or those of its principal customers; and the ability of the Company to attract and retain customers. Additional factors are discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s filings with the Securities and Exchange Commission, including those set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and the Company’s Quarterly Reports on Form 10-Q for the three months ended March 31, 2024 and June 30, 2024. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect the Company. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events and/or otherwise, except as may be required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240909400752/en/

Investor Contact:

Jane Wu

+1.617.603.7941

jane.wu@aptiv.com

Source: Aptiv PLC

FAQ

What is the total value of notes priced by Aptiv PLC (APTV)?

Aptiv PLC (APTV) has priced a total of $2.15 billion in notes, consisting of $1.65 billion in Senior Notes and $500 million in Subordinated Notes.

When are the new Aptiv PLC (APTV) notes expected to close?

The new notes offerings from Aptiv PLC (APTV) are expected to close on September 13, 2024, subject to customary closing conditions.

What will Aptiv PLC (APTV) use the proceeds from the notes for?

Aptiv PLC (APTV) will use the proceeds to redeem its 2.396% senior notes due 2025 and, along with cash on hand, to repay outstanding loans under a Bridge Credit Agreement dated August 1, 2024.

What are the interest rates for Aptiv PLC's (APTV) newly priced Senior Notes?

Aptiv PLC's (APTV) newly priced Senior Notes have interest rates of 4.650% for 2029 notes, 5.150% for 2034 notes, and 5.750% for 2054 notes.