Herbalife Expects to Complete $1.6 Billion Secured Refinancing on April 12

Rhea-AI Summary

Herbalife (NYSE: HLF) announces a $1.2 billion secured refinancing, including a $400 million Term Loan B facility and a $400 million revolving credit facility. The company aims to repay existing loans and notes, focusing on growth and shareholder value.

Insights

Financial Analyst

Herbalife's move to refinance a significant portion of its debt portfolio is a strategic decision that could have notable implications for the company's financial health and flexibility. By securing a $400 million Term Loan B and a $400 million revolving credit facility, the company is not only addressing its immediate debt obligations but also potentially reducing its interest expenses and extending maturities. This could improve cash flow management and provide more room for investment in growth initiatives.

However, investors should carefully monitor the terms of the new debt, including interest rates and covenants, which will determine the actual cost of capital and any new financial restrictions the company may face. The fact that the company is replacing its current facilities before their maturity could signal a proactive approach to capital management, but it also raises questions about the company's access to capital and future debt market conditions.

Given that Herbalife operates in a competitive health and wellness market, maintaining financial agility is key to capitalizing on market opportunities and managing risks. The refinancing could be a positive sign of the company's commitment to financial prudence and shareholder value, assuming it leads to a more favorable debt structure.

Market Research Analyst

Herbalife's refinancing announcement may suggest a broader strategy to optimize its operational efficiency and strengthen its market position. In the health and wellness sector, companies often need to invest heavily in marketing, research and development and global expansion. By refinancing existing debt, Herbalife might be aiming to free up resources for these critical areas.

The impact on the stock market will largely depend on investor perception of the company's ability to manage its debt and generate growth. If the market views this refinancing as a sign of financial stability and foresight, it could lead to positive sentiment and a potential uptick in Herbalife's stock price. Conversely, if the terms of the refinancing are less favorable than the market expects, or if there is skepticism about the company's growth prospects, there could be a negative reaction.

It's also important to consider the timing of the refinancing, set for April 2024. The advance notice gives investors time to assess Herbalife's performance leading up to the refinancing and to gauge the health of the credit markets at that time. Market conditions, interest rates and investor confidence in the sector will all play roles in how this refinancing is ultimately perceived and its subsequent impact on the company's stock.

LOS ANGELES--(BUSINESS WIRE)-- Herbalife Ltd. (NYSE: HLF) (the “Company”), a premier health and wellness company, community and platform, today announced it is in the process of completing its previously announced $1.2 billion secured refinancing, which is expected to include a $400 million, 5-year senior secured Term Loan B facility. In addition, the Company intends to refinance its current $330 million senior secured revolving credit facility maturing in March 2025, with a $400 million, 4-year senior secured revolving credit facility.

The Company expects to use the proceeds from the refinancings to repay its 2018 Term Loan A, Term Loan B, and revolving credit facility, as well as a portion of the 2025 Senior Notes.

“We are pleased that this transaction will allow us to remain focused on positioning Herbalife for continued growth and returning value to our shareholders,” said John DeSimone, Chief Financial Officer.

The terms of the proposed refinancing transactions will be disclosed upon completion of the transactions. The proposed refinancing transactions are expected to close on April 12, 2024, subject to customary closing conditions. There can be no assurance that any of the refinancings will occur successfully, or at all.

About Herbalife Ltd.

Herbalife (NYSE: HLF) is a premier health and wellness company, community and platform that has been changing people's lives with great nutrition products and a business opportunity for its independent distributors since 1980. The Company offers science-backed products to consumers in more than 90 markets through entrepreneurial distributors who provide one-on-one coaching and a supportive community that inspires their customers to embrace a healthier, more active lifestyle to live their best life.

Forward-Looking Statements

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management, including for future operations, capital expenditures, or share repurchases; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; any statements of belief or expectation; and any statements of assumptions underlying any of the foregoing or other future events. Forward-looking statements may include, among others, the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect,” “anticipate” or any other similar words.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results or outcomes could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, many of which are beyond our control. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in or implied by our forward-looking statements include the following:

• the potential impacts of current global economic conditions, including inflation, on us; our Members, customers, and supply chain; and the world economy;
• our ability to attract and retain Members;
• our relationship with, and our ability to influence the actions of, our Members;
• our noncompliance with, or improper action by our employees or Members in violation of, applicable U.S. and foreign laws, rules, and regulations;
• adverse publicity associated with our Company or the direct-selling industry, including our ability to comfort the marketplace and regulators regarding our compliance with applicable laws;
• changing consumer preferences and demands and evolving industry standards, including with respect to climate change, sustainability, and other environmental, social, and governance, or ESG, matters;
• the competitive nature of our business and industry;
• legal and regulatory matters, including regulatory actions concerning, or legal challenges to, our products or network marketing program and product liability claims;
• the Consent Order entered into with the FTC, the effects thereof and any failure to comply therewith;
• risks associated with operating internationally and in China;
• our ability to execute our growth and other strategic initiatives, including implementation of our restructuring initiatives, and increased penetration of our existing markets;
• any material disruption to our business caused by natural disasters, other catastrophic events, acts of war or terrorism, including the war in Ukraine, cybersecurity incidents, pandemics, and/or other acts by third parties;
• our ability to adequately source ingredients, packaging materials, and other raw materials and manufacture and distribute our products;
• our reliance on our information technology infrastructure;
• noncompliance by us or our Members with any privacy laws, rules, or regulations or any security breach involving the misappropriation, loss, or other unauthorized use or disclosure of confidential information;
• contractual limitations on our ability to expand or change our direct-selling business model;
• the sufficiency of our trademarks and other intellectual property;
• product concentration;
• our reliance upon, or the loss or departure of any member of, our senior management team;
• restrictions imposed by covenants in the agreements governing our indebtedness;
• risks related to our convertible notes;
• changes in, and uncertainties relating to, the application of transfer pricing, income tax, customs duties, value added taxes, and other tax laws, treaties, and regulations, or their interpretation;
• our incorporation under the laws of the Cayman Islands; and
• share price volatility related to, among other things, speculative trading and certain traders shorting our common shares.

Additional factors and uncertainties that could cause actual results or outcomes to differ materially from our forward-looking statements are set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission on February 14, 2024, including under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in our Consolidated Financial Statements and the related Notes included therein. In addition, historical, current, and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.

Forward-looking statements made in this release speak only as of the date hereof. We do not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240405915697/en/

Media Contact:

Thien Ho

Vice President, Global Corporate Communications

thienh@herbalife.com



Investor Contact:

Erin Banyas

Vice President, Head of Investor Relations

erinba@herbalife.com

Source: Herbalife Ltd.

FAQ

What is Herbalife 's ticker symbol?

Herbalife 's ticker symbol is HLF.

What is the total amount of the announced refinancing by Herbalife ?

Herbalife announced a $1.2 billion secured refinancing.

When is the expected closing date for the proposed refinancing transactions by Herbalife ?

The proposed refinancing transactions by Herbalife are expected to close on April 12, 2024, subject to customary closing conditions.

What does Herbalife plan to do with the proceeds from the refinancings?

Herbalife plans to use the proceeds from the refinancings to repay its 2018 Term Loan A, Term Loan B, and revolving credit facility, as well as a portion of the 2025 Senior Notes.