Cimpress Successfully Completes Repricing of Term Loan B and Lowers its Cost of Capital
Cimpress (Nasdaq: CMPR) has successfully repriced its $773 million USD Term Loan B (TLB) and increased it by $264 million, bringing the total to $1,037 million. The company used the additional funds to prepay most of its Euro TLB tranche, reducing it to €46 million. Cimpress executed a cross-currency swap to retain the lower base rate and currency mix of the Euro TLB tranche. These actions are expected to reduce annual cash interest expenses by approximately $6 million. The interest rate margin on the USD TLB tranche was lowered by 50 basis points to SOFR plus 3.00%, and the credit spread adjustment was removed. The Euro TLB tranche's interest rate remains unchanged at EURIBOR plus 3.50%. The maturity date for both tranches remains May 17, 2028.
- Repricing of $773 million USD TLB successfully completed.
- USD TLB tranche upsized by $264 million to $1,037 million.
- Prepayment of majority of Euro TLB tranche, now €46 million.
- Cross-currency swap executed to maintain lower base rate and currency mix.
- Estimated annual cash interest expense reduction of approximately $6 million.
- Interest rate margin on USD TLB tranche reduced by 50 basis points to SOFR plus 3.00%.
- Credit spread adjustment on USD TLB tranche removed.
- No material changes to the terms and conditions of the TLB.
- The Euro TLB tranche interest rate remains unchanged at EURIBOR plus 3.50%.
Cimpress has effectively utilized the current favorable interest rate environment to reprice its Term Loan B, translating into significant cost savings. By lowering the interest rate margin by 50 basis points, Cimpress will save approximately
However, investors should note that while these savings are beneficial, the overall net leverage remains neutral, meaning the company's overall debt level hasn't changed. This is important for evaluating Cimpress' long-term financial health and debt serviceability. The maturity date extension to 2028 provides the company with a stable outlook for its debt obligations in the near term.
In summary, this financial maneuver positions Cimpress to manage its debt more efficiently and allocate capital savings potentially towards growth initiatives or further debt reduction. It reflects sound financial strategy and stability in the current volatile market conditions.
The repricing and upsizing of Cimpress' Term Loan B, along with the concurrent cross-currency swap, align with a trend among companies to optimize their capital structures in a low-interest-rate environment. By reducing the USD TLB tranche's interest rate margin and removing the credit spread adjustment, Cimpress demonstrates agility in financial management.
From a market perspective, such actions can enhance investor confidence by showcasing proactive steps to reduce financing costs. This can result in improved profitability metrics in future earnings reports, indirectly supporting the company's stock performance.
Investors might also be interested in how these savings may be reinvested. Will Cimpress use this opportunity to fund new ventures or focus on shoring up its balance sheet? Such strategic decisions will be pivotal in driving long-term value.
DUNDALK,
Cimpress estimates these actions will reduce annualized cash interest expense by approximately
These actions are net leverage neutral, reduce the interest rate margin applicable to the USD TLB tranche by 50 basis points to SOFR plus
No other material changes were made to the terms and conditions of the TLB. The maturity date for both tranches of the TLB remains May 17, 2028.
About Cimpress
Cimpress plc (Nasdaq: CMPR) invests in and builds customer-focused, entrepreneurial, print mass-customization businesses for the long term. Mass customization is a competitive strategy which seeks to produce goods and services to meet individual customer needs with near mass production efficiency. Cimpress businesses include BuildASign, Drukwerkdeal, Exaprint, National Pen, Pixartprinting, Printi, VistaPrint, and WIRmachenDRUCK. To learn more, visit cimpress.com.
Cimpress and the Cimpress logo are trademarks of Cimpress plc or its subsidiaries. All other brand and product names appearing on this announcement may be trademarks or registered trademarks of their respective holders.
SAFE HARBOR STATEMENT:
This press release contains statements about our future expectations, plans, and prospects of our business that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995, including the cash interest expense savings we expect from the repricing.
Forward-looking projections and expectations are inherently uncertain, are based on assumptions and judgments by management, and may turn out to be wrong. Our actual results may differ materially from those indicated by the forward-looking statements in this document as a result of various important factors, including but not limited to flaws in the assumptions and judgments upon which our forecasts and estimates are based; our ability to maintain compliance with our debt covenants and pay our debts when due; general economic conditions and changes in interest rates; and other factors described in our Form 10-K for the fiscal year ended June 30, 2023 and the other documents we periodically file with the
In addition, the statements and projections in this press release represent our expectations and beliefs as of the date of this document and should not be relied upon as representing our expectations or beliefs as of any date subsequent to the date of this document. Subsequent events and developments may cause these expectations, beliefs, and projections to change, and we specifically disclaim any obligation to update any forward-looking statements.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240515066210/en/
Investor Relations:
Meredith Burns
ir@cimpress.com
+1.781.652.6480
Media Relations:
Sara Litwiller
mediarelations@cimpress.com
Source: Cimpress plc
FAQ
What is the new amount of Cimpress' USD Term Loan B tranche?
How much did Cimpress upsize its USD Term Loan B tranche?
What was the purpose of the additional $264 million in the USD TLB tranche?
How much is the Euro TLB tranche after the prepayment?
What are the expected annual cash interest expense savings from these actions?
What is the new interest rate margin on the USD TLB tranche?
Did the interest rate for the Euro TLB tranche change?
When is the maturity date for both tranches of Cimpress' TLB?
