HC2 Holdings Seeks to Refinance Substantially All of its Existing Debt

Rhea-AI Summary

HC2 Holdings (NYSE: HCHC) announced plans to refinance its 11.500% senior secured notes due 2021 and a portion of 7.5% convertible senior notes due 2022. The refinancing will involve issuing new senior secured notes and extending some existing convertible notes. Proceeds will be used to redeem existing notes, repay revolving credit debt, and cover related expenses. The completion of these transactions depends on market conditions, and there is no guarantee they will occur.

Positive

• Refinancing plan aims to improve financial stability by replacing high-interest debt.
• Proceeds from new notes will be used to redeem existing high-interest secured notes.

Negative

• Uncertainty in completion of refinancing transactions due to market conditions.
• Issuance of new notes not registered under the U.S. Securities Act, limiting investor access.

NEW YORK, Jan. 22, 2021 (GLOBE NEWSWIRE) -- HC2 Holdings, Inc. (“HC2” or the “Company”) (NYSE: HCHC), a diversified holding company, announced today that it is seeking to refinance all of its existing 11.500% senior secured notes due 2021 and a portion of existing 7.5% convertible senior notes due 2022. As part of the proposed refinancing transactions, the Company intends to, among other things, issue new senior secured notes and extend the maturity of a portion of its existing convertible notes by exchanging such existing convertible notes for new convertible notes.

The proceeds from the issuance of the new senior secured notes are expected to be used, together with other funds, to redeem in full HC2’s existing senior secured notes, repay the outstanding indebtedness under its revolving credit agreement and pay related fees and expenses.

The proposed refinancing transactions are subject to market and other conditions, and the Company cannot make any assurances that it will complete any such transactions, in whole or in part, or as to the amount or timing of any such transactions.

The new senior secured notes and the new convertible notes will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), any state securities laws or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from registration. The new senior secured notes are expected to be offered and sold only to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act, and the new convertible notes are expected to be issued in one or more private exchange transactions pursuant to an exemption from registration under the Securities Act.

This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any security and shall not constitute an offer, solicitation or sale of any security in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About HC2

HC2 (NYSE: HCHC) has a class-leading portfolio of assets primarily in Infrastructure, Life Sciences, Spectrum and Insurance. HC2 is headquartered in New York, New York and through its subsidiaries employs 2,864 people.

Cautionary Statement Regarding Forward-Looking Statements

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This press release contains, and certain oral statements made by our representatives from time to time may contain, forward-looking statements regarding the proposed refinancing transactions, including, among others, the use of proceeds from the issuance of the new senior secured notes, all of which involve risks, assumptions and uncertainties, many of which are outside of the Company's control, and are subject to change. All forward-looking statements speak only as of the date made, and unless legally required, HC2 undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Media Contact:
Reevemark
Paul Caminiti/Pam Greene/Luc Herbowy
HC2@reevemark.com 
(212) 433-4600

Investor Contact:
FNK IR
Matt Chesler, CFA
ir@hc2.com 
(212) 235-2691

FAQ

What refinancing plans did HC2 Holdings announce on January 22, 2021?

HC2 Holdings announced plans to refinance its 11.500% senior secured notes due 2021 and a portion of its 7.5% convertible senior notes due 2022.

How will HC2 Holdings use the proceeds from the refinancing?

The proceeds will be used to redeem existing senior secured notes, repay revolving credit debt, and cover related fees and expenses.

What are the risks associated with HC2 Holdings' refinancing plan?

The completion of the refinancing transactions is subject to market conditions, posing risks and uncertainties.

What is the financial condition of HC2 Holdings based on the press release?

HC2 Holdings is looking to improve its financial condition by refinancing high-interest debt but faces uncertainty regarding transaction completion.