Icahn Enterprises L.P. Announces Closing of $500 Million Senior Notes Offering and Additional $200 Million Senior Notes Offering

Rhea-AI Summary

Icahn Enterprises L.P. (NASDAQ: IEP) announced the completion of a private placement offering of $700,000,000 aggregate principal amount of 9.750% Senior Notes due 2029. The net proceeds will be used to redeem existing 4.75% Senior Unsecured Notes due 2024. The offering was made to qualified institutional buyers in the U.S. and non-U.S. persons in compliance with regulations.

Insights

Financial Analyst

The consummation of the $700 million senior notes offering by Icahn Enterprises L.P. is a significant financial event that warrants attention from investors and market analysts. The decision to issue notes at a 9.750% interest rate, which is notably higher than the redeemed 4.75% Senior Unsecured Notes due 2024, indicates a strategic move to manage the company's debt profile. The use of proceeds to redeem existing debt suggests a refinancing strategy aimed at extending the maturity of the company's liabilities.

From a financial perspective, this action could be seen as a double-edged sword. On one hand, it alleviates near-term liquidity concerns by addressing upcoming debt maturities. On the other, it does so at the cost of higher interest expenses, which could impact the company's future earnings and cash flow. Investors should closely monitor the company's leverage ratios and interest coverage metrics following this transaction.

The private placement nature of the offering, targeting qualified institutional buyers and international investors, reflects a tailored approach to raising capital while bypassing public registration requirements. This method can expedite the process but limits the pool of potential investors.

Debt Market Analyst

In the context of the broader debt market, the 9.750% yield on the newly issued senior notes is indicative of the risk premium demanded by investors. This could reflect market sentiment about the creditworthiness of Icahn Enterprises or a broader market trend of rising interest rates. Comparing this yield to the industry average for similar maturities and credit ratings can provide insights into the company's relative market position.

Additionally, the early redemption of the 2024 Notes before maturity might lead to speculation about the company's long-term financial strategy and its assessment of future interest rate environments. The transaction's timing could suggest an attempt to lock in financing costs before potential rate increases, which aligns with current concerns about inflationary pressures and monetary policy tightening.

Legal Expert in Securities

The legal framework surrounding the offering, particularly the reliance on exemptions such as Rule 144A and Regulation S, is critical for compliance with securities laws. These exemptions allow the issuers to raise capital from sophisticated investors without the extensive disclosures required for public offerings. However, the absence of these disclosures means that investors must rely on their own due diligence and understanding of the issuer's financial health.

Investors should be aware of the restrictions on the resale of the notes, given they have not been registered under the Securities Act. The legal stipulations of the indenture, the role of Wilmington Trust as trustee and the guarantees by Icahn Enterprises Holdings L.P. are all essential elements that contribute to the enforceability and security of the investment.

SUNNY ISLES BEACH, Fla., Dec. 19, 2023 /PRNewswire/ -- Icahn Enterprises L.P. (NASDAQ: IEP) – Icahn Enterprises L.P. ("Icahn Enterprises") announced today that it, together with Icahn Enterprises Finance Corp. (together with Icahn Enterprises, the "Issuers"), consummated their offering of (i) $500,000,000 aggregate principal amount of 9.750% Senior Notes due 2029 (the "Initial Notes") in a private placement not registered under the Securities Act of 1933, as amended (the "Securities Act") (such offering, the "Initial Notes Offering") and (ii) $200,000,000 aggregate principal amount of additional 9.750% Senior Notes due 2029 (the "Additional Notes," and, together with the Initial Notes, the "Notes") in a private placement not registered under the Securities Act (such offering, the "Additional Notes Offering," and, together with the Initial Notes Offering, the "Notes Offering"). The Notes were issued under an indenture, dated as of the date hereof, by and among the Issuers, Icahn Enterprises Holdings L.P., as guarantor (the "Guarantor"), and Wilmington Trust, National Association, as trustee, and are guaranteed by the Guarantor. The net proceeds from the Notes Offering will be used, together with cash on hand, to redeem the Issuers' existing 4.75% Senior Unsecured Notes due 2024 (the "2024 Notes") in full on or around June 15, 2024. The 2024 Notes have been satisfied and discharged simultaneously with the closing of the Notes Offering.

The Notes and related guarantees were made only (1) in the United States to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act and (2) outside the United States to persons other than "U.S. persons" in compliance with Regulation S under the Securities Act. The Notes and related guarantees have not been registered under the Securities Act 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 the registration requirements.

This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act. This press release shall not constitute an offer to sell or a solicitation of an offer to buy any securities of the Issuers.

About Icahn Enterprises L.P.

Icahn Enterprises L.P. (NASDAQ: IEP), a master limited partnership, is a diversified holding company owning subsidiaries currently engaged in the following continuing operating businesses: Investment, Energy, Automotive, Food Packaging, Real Estate, Home Fashion and Pharma.

Caution Concerning Forward-Looking Statements

This release contains certain statements that are, or may deemed to be, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, many of which are beyond our ability to control or predict. Forward-looking statements may be identified by words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "will" or words of similar meaning and include, but are not limited to, statements about the expected future business and financial performance of Icahn Enterprises and its subsidiaries. Actual events, results and outcomes may differ materially from our expectations due to a variety of known and unknown risks, uncertainties and other factors, including risks related to economic downturns, substantial competition and rising operating costs; the impacts from the Russia/Ukraine conflict and conflict in the Middle East, including economic volatility and the impacts of export controls and other economic sanctions; risks related to our investment activities, including the nature of the investments made by the private funds in which we invest, declines in the fair value of our investments as a result of the COVID-19 pandemic, losses in the private funds and loss of key employees; risks related to our ability to continue to conduct our activities in a manner so as to not be deemed an investment company under the Investment Company Act of 1940, as amended, or to be taxed as a corporation; risks related to short sellers and associated litigation and regulatory inquiries; risks related to our energy business, including the volatility and availability of crude oil, other feed stocks and refined products, declines in global demand for crude oil, refined products and liquid transportation fuels, unfavorable refining margin (crack spread), interrupted access to pipelines, significant fluctuations in nitrogen fertilizer demand in the agricultural industry and seasonality of results; risks related to our automotive activities and exposure to adverse conditions in the automotive industry, including as a result of the COVID-19 pandemic and the Chapter 11 filing of our automotive parts subsidiary; risks related to our food packaging activities, including competition from better capitalized competitors, inability of our suppliers to timely deliver raw materials, and the failure to effectively respond to industry changes in casings technology; supply chain issues; inflation, including increased costs of raw materials and shipping, including as a result of the Russia/Ukraine conflict and conflict in the Middle East; interest rate increases; labor shortages and workforce availability; risks related to our real estate activities, including the extent of any tenant bankruptcies and insolvencies; risks related to our home fashion operations, including changes in the availability and price of raw materials, manufacturing disruptions, and changes in transportation costs and delivery times; and other risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission including our Annual Report on Form 10-K and our quarterly reports on Form 10-Q under the caption "Risk Factors". Additionally, there may be other factors not presently known to us or which we currently consider to be immaterial that may cause our actual results to differ materially from the forward-looking statements. Past performance in our Investment segment is not indicative of future performance. We undertake no obligation to publicly update or review any forward-looking information, whether as a result of new information, future developments or otherwise.

Investor Contact:

Ted Papapostolou, Chief Financial Officer
IR@ielp.com
(800) 255-2737

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SOURCE Icahn Enterprises L.P.

FAQ

What did Icahn Enterprises announce?

Icahn Enterprises announced the completion of a private placement offering of $700,000,000 aggregate principal amount of 9.750% Senior Notes due 2029.

How will the net proceeds be used?

The net proceeds will be used to redeem existing 4.75% Senior Unsecured Notes due 2024.

Who was the offering made to?

The offering was made to qualified institutional buyers in the U.S. and non-U.S. persons in compliance with regulations.

What is the ticker symbol for Icahn Enterprises?

The ticker symbol for Icahn Enterprises is IEP.

What is the Securities Act of 1933?

The Securities Act of 1933 is a federal statute governing securities transactions to ensure investors are provided with sufficient information about securities being offered for public sale.