Avery Dennison Prices €500 Million Senior Notes Offering

Rhea-AI Summary

Avery Dennison (NYSE: AVY) has priced a €500 million public offering of 3.750% Senior Notes due 2034 at 99.672% of their principal amount. The offering is expected to close on November 4, 2024. The company plans to use the proceeds to repay its existing €500 million 1.250% senior notes due March 3, 2025, and for general corporate purposes. The offering is led by multiple joint book-running managers including Merrill Lynch International, Mizuho International plc, and SMBC Bank International plc, among others.

Positive

• Successful pricing of €500 million Senior Notes offering
• Strategic refinancing of existing debt at maturity
• Strong banking syndicate supporting the offering

Negative

• Higher interest rate on new notes (3.750%) compared to existing notes (1.250%)
• Slight discount pricing at 99.672% of principal amount

Insights

Fixed Income Analyst

This €500 million senior notes offering at 3.750% represents a strategic refinancing move to address the upcoming maturity of existing 1.250% notes due in March 2025. The higher interest rate reflects the current rate environment, increasing AVY's borrowing costs by about €12.5 million annually. The pricing at 99.672% of par indicates solid market reception. While the increased interest expense will impact the bottom line, the company maintains its credit profile by effectively managing its debt maturity schedule. This proactive refinancing eliminates near-term refinancing risk and provides certainty in the company's capital structure.

MENTOR, Ohio--(BUSINESS WIRE)-- Avery Dennison Corporation (NYSE: AVY) announced today that it has priced an underwritten public offering of €500 million aggregate principal amount of 3.750% Senior Notes due 2034. The Senior Notes were priced at 99.672% of their principal amount. The offering is expected to close on November 4, 2024, subject to customary closing conditions.

Avery Dennison intends to use the net proceeds from the offering to repay in full the €500 million aggregate principal amount of its 1.250% senior notes due 2025 when they mature on March 3, 2025 and for general corporate purposes.

The joint book-running managers for this offering are Merrill Lynch International, Mizuho International plc, SMBC Bank International plc, Citigroup Global Markets Limited, Goldman Sachs & Co. LLC, HSBC Continental Europe, J.P. Morgan Securities plc and PNC Capital Markets LLC, with Academy Securities, Inc., ING Bank N.V., Belgian Branch, Loop Capital Markets LLC and Standard Chartered Bank as co-managers.

The offering is being made pursuant to an effective registration statement (containing a prospectus) that has been filed with the Securities and Exchange Commission (the “SEC”). A preliminary prospectus supplement related to the offering has been filed with the SEC and is available on the SEC’s website at http://www.sec.gov. A copy of the preliminary prospectus supplement and accompanying prospectus may also be obtained by calling Merrill Lynch International toll-free at +1-800-294-1322, Mizuho International plc at +44-207-248-3920 and SMBC Bank International plc toll-free at +44-204-507-1000.

This press release does not constitute an offer to sell or a solicitation of an offer to buy these 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. Any offer, solicitation or sale of these securities will be made only by means of the prospectus supplement and the accompanying prospectus.

About Avery Dennison

Avery Dennison Corporation (NYSE: AVY) is a global materials science and digital identification solutions company that provides a wide range of branding and information solutions that optimize labor and supply chain efficiency, reduce waste, advance sustainability, circularity and transparency, and better connect brands and consumers. Our products and solutions include labeling and functional materials, radio frequency identification (RFID) inlays and tags, software applications that connect the physical and digital, and a variety of products and solutions that enhance branded packaging and carry or display information that improves the customer experience. Serving an array of industries worldwide — including home and personal care, apparel, general retail, e-commerce, logistics, food and grocery, pharmaceuticals and automotive — we employ approximately 35,000 employees in more than 50 countries. Our reported sales in 2023 were $8.4 billion.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:

Certain statements contained in this document are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements, and financial or other business targets, are subject to certain risks and uncertainties. Forward-looking statements also include those related to the closing of this offering.

Actual results and trends may differ materially from historical or anticipated results depending on a variety of factors, including but are not limited to, risks and uncertainties relating to our ability to satisfy the conditions to closing the offering.

For a more detailed discussion of these and other factors, see “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2023 Form 10-K, filed with the SEC on February 21, 2024, and subsequent quarterly reports on Form 10-Q.

The forward-looking statements included in this document are made only as of the date of this document, and we undertake no obligation to update these statements to reflect new, changed or unanticipated events or circumstances, other than as may be required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241030008558/en/

John Eble

Vice President, Finance and Investor Relations

investorcom@averydennison.com

Kristin Robinson

Vice President, Global Communications

kristin.robinson@averydennison.com

Source: Avery Dennison Corporation

FAQ

What is the interest rate of Avery Dennison's (AVY) new Senior Notes offering?

Avery Dennison's new Senior Notes offering carries an interest rate of 3.750%.

When will Avery Dennison's (AVY) new €500 million Senior Notes mature?

The new Senior Notes will mature in 2034.

What is the purpose of Avery Dennison's (AVY) €500 million Senior Notes offering?

The proceeds will be used to repay the existing €500 million 1.250% senior notes due March 3, 2025, and for general corporate purposes.

At what price were Avery Dennison's (AVY) new Senior Notes offered?

The Senior Notes were priced at 99.672% of their principal amount.