BorgWarner Announces Final Results of its Cash Tender Offers for its Senior Notes

Rhea-AI Summary

BorgWarner Inc. (NYSE: BWA) has announced the final results of its cash tender offers for its 3.375% Senior Notes due 2025 and 5.000% Senior Notes due 2025. The tender offers expired on August 13, 2024, at 5:00 p.m., New York City time. For the 3.375% Notes, $50,975,000 or 13.26% of the outstanding amount was tendered. For the 5.000% Notes, $64,918,000 or 14.32% of the outstanding amount was tendered.

BorgWarner expects to accept all validly tendered notes for payment, with the settlement scheduled for August 16, 2024. The completion of the tender offers remains subject to certain conditions, including a financing condition. BofA Securities, Citigroup Global Markets, and Wells Fargo Securities served as dealer managers for the offers.

Positive

• Successful completion of tender offers for senior notes
• 13.26% of 3.375% Senior Notes due 2025 tendered ($50,975,000)
• 14.32% of 5.000% Senior Notes due 2025 tendered ($64,918,000)

Negative

• None.

Financial Analyst

BorgWarner's tender offer results reveal moderate participation, with 13.26% of the 3.375% Notes and 14.32% of the 5.000% Notes tendered. This response suggests investors may find the current yield attractive or expect better opportunities in the future. The company's ability to retire $115.893 million in debt could slightly improve its balance sheet, potentially reducing interest expenses. However, the impact is minimal given the small percentage of notes tendered relative to the total outstanding.

The tender offer's completion, subject to conditions including a financing condition, indicates BorgWarner may be preparing for refinancing or restructuring its debt. This proactive approach to debt management could provide financial flexibility, but investors should monitor for any new debt issuances or changes in the company's capital structure that may follow this tender offer.

Market Research Analyst

The lukewarm response to BorgWarner's tender offers might signal investor confidence in the company's current financial position or expectations of rising interest rates. With only about 14% of notes tendered, many bondholders seem content holding onto their investments. This could be interpreted as a positive market sentiment towards BorgWarner's credit quality and future prospects.

However, the company's decision to repurchase these notes ahead of their 2025 maturity suggests a strategic move to manage its debt profile. Investors should watch for subsequent actions, such as new debt issuances or changes in capital allocation strategies, which could provide insights into BorgWarner's long-term financial planning and its view on future market conditions.

AUBURN HILLS, Mich., Aug. 14, 2024 /PRNewswire/ -- BorgWarner Inc. (NYSE: BWA) (the "Company") today announced the expiration and final results of its previously announced tender offers (the "Tender Offers") to purchase for cash any and all of the Company's outstanding 3.375% Senior Notes due 2025 (the "3.375% Notes") and 5.000% Senior Notes due 2025 (the "5.000% Notes" and collectively with the 3.375% Notes, the "Notes"), on the terms and conditions set forth in the Offer to Purchase, dated August 7, 2024 (the "Offer to Purchase") and the related Notice of Guarantee Delivery attached to the Offer to Purchase (the "Notice of Guaranteed Delivery" and collectively with the Offer to Purchase, the "Tender Offer Documents").

The Tender Offers expired at 5:00 p.m., New York City time, on August 13, 2024 (such time and date, the "Expiration Time").

At the Expiration Time, according to information provided by the tender and information agent for the Tender Offers, the aggregate principal amount of each series of Notes validly tendered and not validly withdrawn pursuant to the Tender Offers, which includes the aggregate principal amount of each series of Notes reflected in notices of guaranteed delivery delivered, are set forth in the table below. Withdrawal rights for the Tender Offers expired at the Expiration Date, and accordingly, Notes validly tendered in the Tender Offers may no longer be withdrawn except where additional withdrawal rights are required by law.

Title of Security	CUSIP No.	Principal Amount Outstanding	Principal Amount Tendered	Percentage of Outstanding Amount Tendered
3.375% Senior Notes due 2025	099724AJ5	$384,474,000	$50,975,000	13.26 %
5.000% Senior Notes due 2025	099724AM8 / U0560UAA0	$453,187,000	$64,918,000	14.32 %

The Company expects to accept for payment all Notes of each series validly tendered and not validly withdrawn prior to the Expiration Time. Payment for all Notes (including Notes tendered by Notice of Guaranteed Delivery) will be made on August 16, 2024. Consummation of the Tender Offers and payment for the Notes remain subject to the satisfaction or waiver of a financing condition and certain other conditions as set forth in the Tender Offer Documents.

BofA Securities, Inc., Citigroup Global Markets Inc. and Wells Fargo Securities, LLC served as the dealer managers for the Tender Offers. Global Bondholder Services Corporation served as the tender and information agent for the Tender Offers.

About BorgWarner

For more than 130 years, BorgWarner (NYSE: BWA) has been a transformative global product leader bringing successful mobility innovation to market. Today, we're accelerating the world's transition to eMobility – to help build a cleaner, healthier, safer future for all.

Forward-Looking Statements

This release may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act that are based on management's current outlook, expectations, estimates and projections. Words such as "anticipates," "believes," "continues," "could," "designed," "effect," "estimates," "evaluates," "expects," "forecasts," "goal," "guidance," "initiative," "intends," "may," "outlook," "plans," "potential," "predicts," "project," "pursue," "seek," "should," "target," "when," "will," "would," and variations of such words and similar expressions are intended to identify such forward-looking statements. Further, all statements, other than statements of historical fact, contained in this release regarding matters that we expect or anticipate will or may occur in the future regarding our financial position, business strategy and measures to implement that strategy, including changes to operations, competitive strengths, goals, expansion and growth of our business and operations, plans, references to future success and other such matters, are forward-looking statements. All forward-looking statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. Forward-looking statements are not guarantees of performance, and the Company's actual results may differ materially from those expressed, projected, or implied in or by the forward-looking statements.

You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. Forward-looking statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed, projected or implied in or by the forward-looking statements. These risks and uncertainties, among others, include supply disruptions impacting us or our customers; commodity availability and pricing, and an inability to achieve expected levels of recoverability in commercial negotiations with customers concerning these costs; competitive challenges from existing and new competitors, including original equipment manufacturer ("OEM") customers; the challenges associated with rapidly changing technologies, particularly as they relate to electric vehicles, and our ability to innovate in response; the difficulty in forecasting demand for electric vehicles and our electric vehicles revenue growth; potential disruptions in the global economy caused by wars or other geopolitical conflicts; the ability to identify targets and consummate acquisitions on acceptable terms; failure to realize the expected benefits of acquisitions on a timely basis; the possibility that our 2023 tax-free spin-off of our former Fuel Systems and Aftermarket segments into a separate publicly traded company will not achieve its intended benefits; the failure to promptly and effectively integrate acquired businesses; the potential for unknown or inestimable liabilities relating to the acquired businesses; our dependence on automotive and truck production, which is highly cyclical and subject to disruptions; our reliance on major OEM customers; impacts of any future strikes involving any of our OEM customers and any actions such OEM customers take in response; fluctuations in interest rates and foreign currency exchange rates; our dependence on information systems; the uncertainty of the global economic environment; the outcome of existing or any future legal proceedings, including litigation with respect to various claims, or governmental investigations, including related litigation; future changes in laws and regulations, including, by way of example, taxes and tariffs, in the countries in which we operate; impacts from any potential future acquisition or disposition transactions; and the other risks noted in reports that we file with the SEC, including Item 1A, "Risk Factors," in our most recently filed Annual Report on Form 10-K and/or Quarterly Report on Form 10-Q. We do not undertake any obligation to update or announce publicly any updates to or revisions to any of the forward-looking statements in this release to reflect any change in our expectations or any change in events, conditions, circumstances, or assumptions underlying the statements. 

 

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SOURCE BorgWarner

FAQ

When did BorgWarner's (BWA) tender offers for its senior notes expire?

BorgWarner's tender offers for its 3.375% and 5.000% Senior Notes due 2025 expired on August 13, 2024, at 5:00 p.m., New York City time.

What percentage of BorgWarner's (BWA) 3.375% Senior Notes due 2025 was tendered?

13.26% of BorgWarner's 3.375% Senior Notes due 2025, equivalent to $50,975,000, was tendered in the offer.

When is BorgWarner (BWA) expected to make payment for the tendered notes?

BorgWarner expects to make payment for all validly tendered notes on August 16, 2024.

What conditions must be met for BorgWarner (BWA) to complete the tender offers?

The completion of BorgWarner's tender offers remains subject to the satisfaction or waiver of a financing condition and certain other conditions as set forth in the Tender Offer Documents.