Pricing of CNH Industrial Capital LLC $600 million notes
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Insights
With CNH Industrial Capital LLC pricing $600 million in aggregate principal amount of notes, this becomes a noteworthy event for investors. The interest rate of 5.100% is competitive, indicating a strong demand for this debt instrument in the current market. This interest rate is also reflective of the company's creditworthiness and the prevailing economic conditions.
Investors should observe the issue price of 99.157%, which is slightly below par. This discount can make the notes more attractive to potential buyers, as it implies a higher yield to maturity. The use of proceeds for working capital and other corporate purposes, including the purchase of receivables, signals CNH Industrial's strategy to strengthen its liquidity position and potentially finance its operations more efficiently.
Considering the maturity date of April 20, 2029, these notes provide a medium-term investment horizon. The semi-annual interest payments offer a regular income stream for bondholders. The fact that the notes are senior unsecured obligations and are guaranteed by CNH Industrial Capital America LLC and New Holland Credit Company, LLC, subsidiaries of CNH Industrial Capital LLC, adds an extra layer of security for investors.
The involvement of prominent financial institutions as joint book-running managers, such as BofA Securities and Citigroup Global Markets, suggests a high level of confidence in CNH Industrial's financial stability and market reputation. The presence of multiple book runners also helps in distributing the risk and ensuring a successful issuance.
From a market perspective, the offering could be a response to the company's assessment of the interest rate environment. If rates are expected to rise, locking in a fixed rate now could be advantageous. The capital raised could also be a strategic move to prepare for acquisitions, debt refinancing, or expansion, which may have a positive impact on the company's long-term growth trajectory.
The decision to apply net proceeds to repay CNH Industrial Capital LLC’s indebtedness as it becomes due is a prudent approach to debt management. It suggests a proactive strategy in managing the company's capital structure and reducing potential refinancing risks associated with future market volatility.
Furthermore, the offering being made pursuant to an effective shelf registration statement indicates a pre-planned financing strategy, allowing the company to act swiftly in favorable market conditions to optimize its capital structure. This agility in the capital markets can be beneficial for CNH Industrial in terms of cost savings and financial flexibility.
Basildon, March 19, 2024
CNH Industrial N.V. (NYSE: CNHI) today announced that its wholly owned subsidiary, CNH Industrial Capital LLC, has priced
CNH Industrial Capital LLC intends to add the net proceeds from the offering to its general funds and use them for working capital and other general corporate purposes, including, among other things, the purchase of receivables or other assets in the ordinary course of business. The net proceeds may also be applied to repay CNH Industrial Capital LLC’s indebtedness as it becomes due.
The notes, which are senior unsecured obligations of CNH Industrial Capital LLC, will pay interest semi-annually on April 20 and October 20 of each year, beginning on October 20, 2024, and will be guaranteed by CNH Industrial Capital America LLC and New Holland Credit Company, LLC, each a wholly owned subsidiary of CNH Industrial Capital LLC. The notes will mature on April 20, 2029.
BofA Securities, Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and MUFG Securities Americas Inc. are acting as joint book-running managers and the representatives of the underwriters for the offering, and BBVA Securities Inc., Credit Agricole Securities (USA) Inc., Rabo Securities USA, Inc. and Wells Fargo Securities, LLC are acting as joint book-running managers for the offering. The offering is being made pursuant to an effective shelf registration statement filed with the U.S. Securities and Exchange Commission on March 14, 2022. Copies of the prospectus supplement and the accompanying prospectus for the offering may be obtained by contacting BofA Securities, Inc., NC1-022-02-25, 201 North Tryon Street, Charlotte, NC 28255-0001, Attn: Prospectus Department, Telephone: 1-800-294-1322, Email: dg.prospectus_requests@bofa.com; Citigroup Global Markets Inc., Attn: Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Telephone: 1-800-831-9146, Email: prospectus@citi.com; Deutsche Bank Securities Inc., Attn: Prospectus Group, 1 Columbus Circle, New York, NY 10019, Telephone: 1-800-503-4611, Email: prospectus-CPDB@db.com; or MUFG Securities Americas Inc., Attn: Capital Markets Group, 1221 Avenue of the Americas, 6th Floor, New York, New York 10020, Telephone: 1-877-649-6848. Copies of the prospectus supplement and the accompanying prospectus for the offering are also available on the website of the U.S. Securities and Exchange Commission at http://www.sec.gov.
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This press release does not constitute an offer to sell or a solicitation of an offer to buy any of these securities, nor shall there be any sale of these securities, in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.
CNH Industrial Capital LLC is an indirect wholly owned subsidiary of CNH Industrial N.V. and is headquartered in Racine, Wisconsin. As a captive finance company, the primary business of CNH Industrial Capital LLC and its subsidiaries is to underwrite and manage financing products for end-use customers and dealers of CNH Industrial America LLC and CNH Industrial Canada Ltd. (collectively, “CNH Industrial North America”) and provide other related financial products and services to support the sale of agricultural and construction equipment sold by CNH Industrial North America. CNH Industrial Capital LLC and its subsidiaries also provide wholesale and retail financing related to new and used agricultural and construction equipment manufactured by entities other than CNH Industrial North America. CNH Industrial Capital LLC’s principal executive offices are located at 5729 Washington Avenue, Racine, WI 53406, and the telephone number is +1(262) 636-6011.
Contacts:
Media Relations
Email: mediarelations@cnh.com
Investor Relations
Email: investor.relations@cnh.com
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FAQ
What is the total amount of notes priced by CNH Industrial Capital ?
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Who guarantees the notes issued by CNH Industrial Capital ?
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