Ingersoll Rand Successfully Completes $3,300 Million Senior Unsecured Bond Offering and New $2,600 Million Senior Unsecured Revolving Credit Facility, Upgraded One Notch by All Three Rating Agencies

Rhea-AI Summary

Ingersoll Rand Inc. successfully completed a $3,300 million Senior Unsecured Bond Offering and established a new $2,600 million Senior Unsecured Revolving Credit Facility. The funds raised will be used for various purposes, including the repayment of term loans, funding an acquisition, and general corporate uses. The company also received an upgrade in its credit ratings by all three major agencies, reflecting its strong financial performance and improved capital structure.

Positive

• Successful completion of a $3,300 million Senior Unsecured Bond Offering.

• Establishment of a new $2,600 million Senior Unsecured Revolving Credit Facility.

• Net proceeds will be used for repayment of term loans, funding acquisitions, and general corporate purposes.

• Issuance of bonds across 5 tranches, extending the weighted average maturity of the debt portfolio.

• Upgrade in credit ratings by all three rating agencies to BBB/BBB/Baa2, reflecting consistent operating performance and improved capital structure.

Negative

• None.

Insights

Financial Analyst

Ingersoll Rand's recent success in completing a $3.3 billion Senior Unsecured Bond offering represents a strategic move in capital restructuring, aiming to provide financing for the acquisition of ILC Dover and other corporate purposes. Such an offering typically indicates a company poised to leverage capital for growth, particularly when linked to acquisitions that can potentially expand market share and drive future revenue. The repayment of existing term loans with part of the proceeds signifies a shift towards an unsecured debt structure, likely to reduce the cost of capital and increase financial flexibility. The extension of debt maturities across various tranches also suggests a deliberate effort to manage liquidity risks. Moreover, the upgrade by major rating agencies to investment-grade status reflects improved creditworthiness, which can often lead to lower borrowing costs and instills investor confidence. For shareholders, this move might be indicative of a strengthened financial position and a management team executing a clear strategic vision. However, it is imperative for investors to monitor the integration of the acquisition and subsequent performance to ensure that the expected synergies and growth materialize.

Credit Analyst

The creditworthiness of Ingersoll Rand has received a positive nod from the major rating agencies, with a one-notch upgrade to investment grade. This repositioning in the credit market is critical, as it potentially lowers the cost of borrowing and signals a lower risk profile for lenders and investors alike. The rating upgrade likely comes on the back of Ingersoll Rand's consistent operational performance and its transition to an unsecured debt structure, which can be a double-edged sword. While unsecured debt may offer more favorable terms and reflects confidence in the company's financial stability, it also places bondholders lower in the hierarchy of claimants in the event of financial distress. It's important for investors to appraise the underlying reasons for the rating upgrade, ensuring these are based on sustainable operational strengths rather than short-term financial engineering. The diversification of maturity profiles across the bond tranches is also telling; it indicates a strategic approach to debt management, aligning debt obligations with cash flow forecasts and long-term financial planning.

Market Research Analyst

From a market dynamics perspective, the enthusiastic investor reception to Ingersoll Rand's bond offering indicates a favorable market perception and trust in the company's growth narrative. The scale of the offering and successful refinancing efforts underscore a robust institutional appetite for the company's debt, which is often a bellwether for broader investor sentiment. However, the true test lies in the utilization of these funds, specifically how effectively Ingersoll Rand integrates ILC Dover and leverages this acquisition for competitive advantage. Investors should keep a keen eye on market responses to these strategic moves, as positive momentum in the stock can often be contingent on successful post-acquisition integration and realization of projected synergies. Furthermore, the ability of the company to navigate the industrial sector’s cyclical nature and manage its expanded debt portfolio will remain critical to maintaining investor confidence in the long term.

DAVIDSON, N.C.--(BUSINESS WIRE)-- Ingersoll Rand Inc. (NYSE: IR) (the “Company” or “Ingersoll Rand”), a global provider of mission-critical flow creation and industrial solutions, announced today that the Company has successfully completed a series of transactions issuing Senior Unsecured Bonds and putting in place a new Senior Unsecured Revolving Credit Facility.

The Company raised $3,276 million in net proceeds from the bond offering, of which $1,236 million was used to repay the term loans under the existing senior secured credit facility in full as part of its replacement as described below, $2,000 million will be used to partially fund the cash consideration for the previously announced ILC Dover acquisition, and the remainder of the net proceeds will be used for general corporate purposes. The offering was split across 5 tranches (3-year, 5-year, 7-year, 10-year, and 30-year) and extends the weighted average maturity of the debt portfolio. The Company also put in place a new $2,600 million Senior Unsecured Revolving Credit Facility with a five-year maturity.

“The Senior Unsecured Bond offering and new Senior Unsecured Revolving Credit Facility complete our secured refinancing efforts and transform our debt portfolio to a fully unsecured investment grade profile,” said Vikram Kini, chief financial officer at Ingersoll Rand. “Investor enthusiasm for the transactions speaks to the investors’ conviction in the Company and confidence in the story and future outlook. The new revolving credit facility will bolster our liquidity and fortify an already very strong balance sheet.”

On May 6, 2024, Ingersoll Rand was upgraded one notch by all three rating agencies. The new ratings are BBB/BBB/Baa2 from S&P, Fitch, and Moody’s, respectively. The upgrade is in recognition of the consistent operating performance and restructuring of the capital structure to fully unsecured.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act of 1933, as amended.

Forward-Looking Statements

This news release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to Ingersoll Rand’s expectations regarding the performance of its business, its financial results, its liquidity and capital resources and other non-historical statements. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “forecast,” “outlook,” “target,” “endeavor,” “seek,” “predict,” “intend,” “strategy,” “plan,” “may,” “could,” “should,” “will,” “would,” “will be,” “on track to” “will continue,” “will likely result,” “guidance” or the negative thereof or variations thereon or similar terminology generally intended to identify forward-looking statements. All statements other than historical facts are forward-looking statements.

These forward-looking statements are based on Ingersoll Rand’s current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially from these current expectations. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) adverse impact on our operations and financial performance due to natural disaster, catastrophe, global pandemics, geopolitical tensions, cyber events, or other events outside of our control; (2) unexpected costs, charges or expenses resulting from completed and proposed business combinations; (3) uncertainty of the expected financial performance of the Company; (4) failure to realize the anticipated benefits of completed and proposed business combinations; (5) the ability of the Company to implement its business strategy; (6) difficulties and delays in achieving revenue and cost synergies; (7) inability of the Company to retain and hire key personnel; (8) evolving legal, regulatory and tax regimes; (9) changes in general economic and/or industry specific conditions; (10) actions by third parties, including government agencies; and (11) other risk factors detailed in Ingersoll Rand’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”), as such factors may be updated from time to time in its periodic filings with the SEC, which are available on the SEC’s website at http://www.sec.gov. The foregoing list of important factors is not exclusive.

Any forward-looking statements speak only as of the date of this release. Ingersoll Rand undertakes no obligation to update any forward-looking statements, whether as a result of new information or developments, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.

About Ingersoll Rand Inc.

Ingersoll Rand Inc. (NYSE: IR), driven by an entrepreneurial spirit and ownership mindset, is dedicated to Making Life Better for our employees, customers, shareholders, and planet. Customers lean on us for exceptional performance and durability in mission-critical flow creation and industrial solutions. Supported by over 80+ respected brands, our products and services excel in the most complex and harsh conditions. Our employees develop customers for life through their daily commitment to expertise, productivity, and efficiency.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240510579861/en/

Investors:

Matthew Fort

Matthew.Fort@irco.com

Media:

Sara Hassell

Sara.Hassell@irco.com

Source: Ingersoll Rand Inc.

FAQ

What is the amount raised in the Senior Unsecured Bond Offering by Ingersoll Rand?

Ingersoll Rand raised $3,300 million in net proceeds from the bond offering.

What will Ingersoll Rand use the $2,000 million proceeds for?

The $2,000 million will be used to partially fund the cash consideration for the ILC Dover acquisition.

When was Ingersoll Rand upgraded by all three rating agencies?

Ingersoll Rand was upgraded on May 6, 2024, to BBB/BBB/Baa2 ratings by S&P, Fitch, and Moody's, respectively.