Lazard Announces Closing of Senior Notes Offering by Lazard Group LLC
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Insights
The completion of Lazard Group LLC's offering of $400 million in Senior Notes with a 6.000% interest rate due in 2031 represents a significant refinancing move. This action indicates a strategic approach to capital management, particularly in the context of repurchasing their existing 3.750% Senior Notes due in 2025. The increase in the interest rate from 3.750% to 6.000% reflects the current market conditions and cost of borrowing, which is likely a result of the prevailing interest rate environment.
The repurchase of the 2025 Notes could lead to potential interest savings if the market rates were to rise further before the 2025 maturity date, although it increases the immediate interest expense due to the higher rate on the new Notes. This move could be seen as a hedge against future interest rate volatility. For stakeholders, the implications are twofold: there is a near-term increase in interest costs, which may affect short-term profitability, but there is also the potential for longer-term stability in the company's debt profile.
Investors and market participants often view such refinancing activities as an indicator of a company's financial health and its management's outlook on future market conditions. Lazard Group's decision to issue new Senior Notes at a higher rate suggests a proactive stance in managing its debt obligations amidst an environment where interest rates are expected to fluctuate. This could be interpreted as a positive signal that the company is taking steps to ensure liquidity and manage risks associated with its debt obligations.
However, the increase in the interest rate also indicates that the cost of capital for firms is rising, which could have broader implications for the financial sector. Companies with significant refinancing needs may face higher costs, potentially impacting their investment decisions and profitability. The successful completion of the offering reassures investors about Lazard Group's creditworthiness and market access, which is crucial for maintaining investor confidence.
The offering was conducted under an effective shelf registration statement filed with the Securities and Exchange Commission, illustrating compliance with regulatory requirements for such transactions. The adherence to the SEC regulations and the detailed disclosure of the use of proceeds demonstrate transparency and corporate governance practices that are essential for investor trust.
Moreover, the exclusion of jurisdictions where the Tender Offer is prohibited and the adherence to local laws where broker or dealer involvement is required, underscores the legal complexities and the need for meticulous legal planning in executing such financial strategies. It is important for investors to understand that such legal considerations can affect the availability and terms of investment opportunities, reflecting the intricate relationship between corporate finance activities and legal compliance.
Lazard Group previously announced its intention to use a portion of the net proceeds from the Offering to repurchase all of its outstanding
This press release is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell the securities described herein. The Tender Offer was made solely by means of the Offer to Purchase and related Letter of Transmittal and Notice of Guaranteed Delivery dated March 6, 2024. The Tender Offer is void in all jurisdictions where it is prohibited. In those jurisdictions where the securities, blue sky or other laws require the Tender Offer to be made by a licensed broker or dealer, the Tender Offer was deemed to have been made on behalf of Lazard Group by the dealer managers for the Tender Offer or one or more registered brokers or dealers licensed under the laws of such jurisdictions.
About Lazard
Founded in 1848, Lazard is one of the world’s preeminent financial advisory and asset management firms, with operations in
Cautionary Note Regarding Forward-Looking Statements:
This press release contains forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “target,” “goal,” or “continue,” and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our strategies, business plans and initiatives and anticipated trends in our business. These forward-looking statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by these forward-looking statements.
These factors include, but are not limited to, those discussed in our Annual Report on Form 10-K under Item 1A “Risk Factors,” and also discussed from time to time in our reports on Forms 10-Q and 8-K, including the following:
- A decline in general economic conditions or the global or regional financial markets;
- A decline in our revenues, for example due to a decline in overall mergers and acquisitions (“M&A”) activity, our share of the M&A market or our assets under management (“AUM”);
- Losses caused by financial or other problems experienced by third parties;
- Losses due to unidentified or unanticipated risks;
- A lack of liquidity, i.e., ready access to funds, for use in our businesses;
- Competitive pressure on our businesses and on our ability to retain and attract employees at current compensation levels; and
- Changes in relevant tax laws, regulations or treaties or an adverse interpretation of these items.
Although we believe the statements reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, achievements or events. Neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date of this release to conform our prior statements to actual results or revised expectations and we do not intend to do so.
Lazard, Inc. is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, Lazard and its operating companies use their websites, and other social media sites to convey information about their businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical and business-related information, and the posting of updates of assets under management in various mutual funds, hedge funds and other investment products managed by Lazard Asset Management LLC and Lazard Frères Gestion SAS. Investors can link to Lazard and its operating company websites through www.lazard.com.
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View source version on businesswire.com: https://www.businesswire.com/news/home/20240312887075/en/
Media contact:
Shannon
shannon.houston@lazard.com
Investor contact:
Alexandra Deignan, +1 212 632 6886
alexandra.deignan@lazard.com
Source: Lazard, Inc.
FAQ
What is the total aggregate principal amount of the 6.000% Senior Notes due 2031 offered by Lazard Group?
What is the purpose of the offering by Lazard Group?
When does the Tender Offer by Lazard Group for the 2025 Notes expire?
Is the Tender Offer by Lazard Group a solicitation to sell securities?
