LCI Industries Announces Proposed Offering of $400 Million Aggregate Principal Amount of Convertible Senior Notes and Proposed Refinance of Term Loan
LCI Industries (NYSE: LCII) has announced plans to offer $400 million in convertible senior notes due 2030 through a private placement to qualified institutional buyers. The company is also launching a $400 million senior secured Term Loan B due 2032.
The convertible notes will be unsecured senior obligations with semi-annual interest payments, maturing March 1, 2030. Initial purchasers have an option to buy an additional $60 million in notes. The company plans to use the proceeds to fund convertible note hedge transactions, repurchase a portion of its existing 2026 convertible notes, and buy back up to $50 million of common stock.
The new Term Loan B will be part of a proposed credit facility that includes a $600 million revolving credit facility maturing in 2030. These funds will be used to refinance existing debt under the company's 2018 credit agreement.
LCI Industries (NYSE: LCII) ha annunciato piani per offrire 400 milioni di dollari in note senior convertibili con scadenza nel 2030 attraverso un collocamento privato a investitori istituzionali qualificati. L'azienda sta anche lanciando un prestito senior garantito Term Loan B di 400 milioni di dollari con scadenza nel 2032.
Le note convertibili saranno obbligazioni senior non garantite con pagamenti di interessi semestrali, in scadenza il 1 marzo 2030. Gli acquirenti iniziali hanno l'opzione di acquistare ulteriori 60 milioni di dollari in note. L'azienda prevede di utilizzare i proventi per finanziare transazioni di copertura delle note convertibili, riacquistare una parte delle sue note convertibili esistenti del 2026 e riacquistare fino a 50 milioni di dollari di azioni ordinarie.
Il nuovo Term Loan B sarà parte di una proposta di struttura di credito che include un fido di credito revolving di 600 milioni di dollari con scadenza nel 2030. Questi fondi saranno utilizzati per rifinanziare il debito esistente ai sensi dell'accordo di credito del 2018 dell'azienda.
LCI Industries (NYSE: LCII) ha anunciado planes para ofrecer 400 millones de dólares en notas senior convertibles con vencimiento en 2030 a través de una colocación privada a compradores institucionales calificados. La empresa también está lanzando un préstamo senior garantizado Term Loan B de 400 millones de dólares con vencimiento en 2032.
Las notas convertibles serán obligaciones senior no garantizadas con pagos de intereses semestrales, que vencerán el 1 de marzo de 2030. Los compradores iniciales tienen la opción de comprar 60 millones de dólares adicionales en notas. La empresa planea utilizar los ingresos para financiar transacciones de cobertura de notas convertibles, recomprar una parte de sus notas convertibles existentes de 2026 y recomprar hasta 50 millones de dólares en acciones ordinarias.
El nuevo Term Loan B será parte de una propuesta de instalación de crédito que incluye una línea de crédito revolvente de 600 millones de dólares con vencimiento en 2030. Estos fondos se utilizarán para refinanciar la deuda existente bajo el acuerdo de crédito de 2018 de la empresa.
LCI Industries (NYSE: LCII)는 2030년 만기 4억 달러 규모의 전환사채를 자격이 있는 기관 투자자에게 사모로 발행할 계획을 발표했습니다. 이 회사는 또한 2032년 만기 4억 달러 규모의 담보가 있는 Term Loan B를 출시하고 있습니다.
전환사채는 반기 이자 지급이 있는 무담보 고위험 채무로, 2030년 3월 1일 만기가 됩니다. 초기 구매자는 추가로 6천만 달러의 채권을 구매할 수 있는 옵션이 있습니다. 회사는 자금을 사용하여 전환사채 헤지 거래를 자금 조달하고, 기존의 2026년 전환사채 일부를 재매입하며, 최대 5천만 달러의 보통주를 재매입할 계획입니다.
새로운 Term Loan B는 2030년 만기의 6억 달러 규모의 회전 신용 시설을 포함하는 제안된 신용 시설의 일부가 될 것입니다. 이 자금은 회사의 2018년 신용 계약에 따라 기존 부채를 재융자하는 데 사용될 것입니다.
LCI Industries (NYSE: LCII) a annoncé des plans pour offrir 400 millions de dollars en obligations senior convertibles arrivant à échéance en 2030 par le biais d'un placement privé réservé aux acheteurs institutionnels qualifiés. L'entreprise lance également un prêt senior garanti Term Loan B de 400 millions de dollars arrivant à échéance en 2032.
Les obligations convertibles seront des obligations senior non garanties avec des paiements d'intérêts semestriels, arrivant à échéance le 1er mars 2030. Les acheteurs initiaux ont la possibilité d'acheter 60 millions de dollars supplémentaires en obligations. L'entreprise prévoit d'utiliser les produits pour financer des transactions de couverture d'obligations convertibles, racheter une partie de ses obligations convertibles existantes de 2026 et racheter jusqu'à 50 millions de dollars d'actions ordinaires.
Le nouveau Term Loan B fera partie d'une proposition de facilité de crédit qui comprend une facilité de crédit revolving de 600 millions de dollars arrivant à échéance en 2030. Ces fonds seront utilisés pour refinancer la dette existante en vertu de l'accord de crédit de 2018 de l'entreprise.
LCI Industries (NYSE: LCII) hat Pläne angekündigt, 400 Millionen Dollar an wandelbaren vorrangigen Anleihen mit Fälligkeit 2030 über eine Privatplatzierung an qualifizierte institutionelle Käufer anzubieten. Das Unternehmen startet auch einen 400 Millionen Dollar vorrangigen gesicherten Term Loan B mit Fälligkeit 2032.
Die wandelbaren Anleihen werden ungesicherte vorrangige Verbindlichkeiten mit halbjährlichen Zinszahlungen sein, die am 1. März 2030 fällig werden. Die Erstkäufer haben die Option, zusätzlich 60 Millionen Dollar an Anleihen zu kaufen. Das Unternehmen plant, die Erlöse zur Finanzierung von Hedging-Transaktionen für die wandelbaren Anleihen, zum Rückkauf eines Teils seiner bestehenden wandelbaren Anleihen von 2026 und zum Rückkauf von bis zu 50 Millionen Dollar an Stammaktien zu verwenden.
Der neue Term Loan B wird Teil einer vorgeschlagenen Kreditfazilität sein, die eine 600 Millionen Dollar revolving Kreditfazilität mit Fälligkeit 2030 umfasst. Diese Mittel werden verwendet, um bestehende Schulden gemäß dem Kreditvertrag von 2018 des Unternehmens umzuschulden.
- Comprehensive refinancing plan to restructure debt obligations
- Implementation of convertible note hedge transactions to reduce potential equity dilution
- $50 million share buyback program announced
- Increased debt load with $400 million new convertible notes
- Potential dilution risk for shareholders from warrant transactions
- Additional interest payment obligations from new debt instruments
Insights
LCI Industries' announcement represents a significant capital structure reorganization through multiple simultaneous financial transactions. The company plans to issue
This comprehensive refinancing package appears designed to extend debt maturities, potentially optimize the company's capital structure, and return value to shareholders through stock repurchases. By extending its debt maturity profile from 2026 to 2030/2032, LCII creates additional financial flexibility and potentially reduces near-term refinancing risk.
The
While stock repurchases typically signal management's confidence, funding them with new debt rather than free cash flow raises questions about the sustainability of this approach. Additionally, the company's existing noteholders may experience complex market dynamics around conversion prices and stock performance during this transition period.
Without explicit details on interest rates, conversion premiums, and specific terms of the refinancing, this appears to be primarily a liability management exercise rather than a reflection of fundamental business changes. Investors should focus on whether these transactions ultimately reduce interest expense, extend maturities on favorable terms, or simply defer financial obligations.
Notes Offering
The Notes will be general unsecured, senior obligations of the Company. Final terms of the Notes, including the initial conversion price, interest rate and certain other terms of the Notes will be determined at the time of pricing of the Offering. The Notes will bear interest, payable semi-annually in arrears, and the Notes will mature on March 1, 2030, unless earlier converted, redeemed or repurchased in accordance with their terms prior to such date. Prior to the close of business on the business day immediately preceding November 1, 2029, noteholders may convert their Notes at their option only upon the satisfaction of certain conditions and during certain periods. On or after November 1, 2029 until the close of business on the second scheduled trading day immediately preceding the maturity date, noteholders may convert all or any portion of their Notes at any time.
The Company will settle conversions by paying cash up to the aggregate principal amount of the Notes to be converted and paying or delivering, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at its election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the Notes being converted, based on the then applicable conversion rate. Noteholders will have the right to require the Company to repurchase for cash all or any portion of their Notes at
The Company intends to use a portion of the net proceeds from the Offering to fund the cost of entering into the convertible note hedge transactions described below (after such cost is partially offset by the proceeds to the Company from the sale of the warrants under the warrant transactions described below). The Company also expects to use the remaining net proceeds from the Offering, together with cash on hand (if necessary), to repurchase (i) a portion of its outstanding
Concurrently with the pricing of the Notes in the Offering, the Company expects to enter into one or more separate and individually negotiated transactions with certain noteholders of the 2026 Notes to repurchase for cash a portion of the 2026 Notes. The terms of the 2026 Notes repurchases are anticipated to be individually negotiated with each such noteholder of the 2026 Notes and will depend on several factors, including the market price of the Company’s common stock and the trading price of the 2026 Notes at the time of such 2026 Notes repurchases. No assurance can be given as to how much, if any, of the 2026 Notes will be repurchased or the terms on which they will be repurchased. The Company expects to negotiate the 2026 Notes repurchases with or through one of the initial purchasers and/or its affiliate. Holders of the 2026 Notes that are repurchased as described above may enter into or unwind various derivatives with respect to the Company's common stock (including entering into derivatives with one or more of the initial purchasers in this offering or their respective affiliates) and/or purchase or sell shares of the Company's common stock, which in the case of the 2026 Note repurchases, are expected to occur concurrently with or shortly after the pricing of the Notes.
In connection with the issuance of the 2026 Notes, the Company entered into convertible note hedge transactions (the “Existing Convertible Note Hedge Transactions”) and warrant transactions (the “Existing Warrant Transactions,” and, together with the Existing Convertible Note Hedge Transactions, the “Existing Call Spread Transactions”) with certain financial institutions (the “Existing Option Counterparties”). If the Company repurchases any of its 2026 Notes, then the Company may enter into agreements with the Existing Option Counterparties concurrently with or shortly after the pricing of the Offering to unwind a portion of: (i) the Existing Convertible Note Hedge Transactions in a notional amount corresponding to the principal amount of 2026 Notes repurchased and (ii) the Existing Warrant Transactions with respect to a number of shares of the Company’s common stock equal to the notional shares underlying the 2026 Notes repurchased. In connection with any such terminations and the related unwinding of the existing hedge position of the Existing Option Counterparties, such Existing Option Counterparties and/or their respective affiliates may sell shares of the Company’s common stock in secondary market transactions and/or unwind various derivative transactions with respect to the Company’s common stock, which may occur concurrently with or shortly after the pricing of the Notes. Repurchases of the 2026 Notes and any unwind of the Existing Call Spread Transactions described above, and the potential related market activities by noteholders of the 2026 Notes that are repurchased by the Company and the Existing Option Counterparties, as applicable, could increase (or reduce the size of any decrease in) or decrease (or reduce the size of any increase in) the market price of the Company’s common stock, which may affect the trading price of the Notes at that time and, to the extent effected concurrently with the pricing of the Notes, the initial conversion price of the Notes. The Company cannot predict the magnitude of such market activity or the overall effect it will have on the price of the Notes or the Company’s common stock.
In connection with the pricing of the Notes, the Company expects to enter into privately negotiated convertible note hedge transactions with one or more of the initial purchasers or affiliates thereof and/or other financial institutions (the “Option Counterparties”). These transactions will cover, subject to customary anti-dilution adjustments, the number of shares of the Company’s common stock that will initially underlie the Notes, and are expected generally to reduce the potential equity dilution, and/or offset any cash payments the Company is required to make in excess of the principal amount due, as the case may be, upon conversion of the Notes.
The Company also expects to enter into separate, privately negotiated warrant transactions with the Option Counterparties at a higher strike price relating to the same number of shares of the Company’s common stock, subject to customary anti-dilution adjustments, pursuant to which the Company will sell warrants to the Option Counterparties. The warrants could have a dilutive effect on the Company’s outstanding common stock and the Company’s earnings per share to the extent that the market price per share of the Company’s common stock exceeds the applicable strike price of those warrants.
If the initial purchasers exercise the Option, the Company expects to enter into additional convertible note hedge transactions and additional warrant transactions with the Option Counterparties, which will initially cover the number of shares of the Company’s common stock that will initially underlie the additional Notes sold to the initial purchasers.
The Company has been advised that in connection with establishing their initial hedges of the convertible note hedge and warrant transactions, the Option Counterparties and/or their respective affiliates expect to enter into various derivative transactions with respect to the Company’s common stock and/or purchase shares of the Company’s common stock concurrently with or shortly after the pricing of the Notes. This activity could have the effect of increasing (or reducing the size of any decrease in) the market price of the Company’s common stock and/or the Notes at that time. The Option Counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to the Company’s common stock and/or purchasing or selling the Company’s common stock or other securities of the Company in secondary market transactions following the pricing of the Notes and prior to the maturity of the Notes (and the Option Counterparties and/or their respective affiliates are likely to do so in connection with any conversion of the Notes or redemption or repurchase of the Notes).
The potential effect, if any, of these transactions and activities on the market price of the Company’s common stock or the Notes will depend in part on market conditions and cannot be ascertained at this time, but any of these activities could adversely affect the value of the Company’s common stock, which could affect the ability of noteholders to convert the Notes, the value of the Notes and the amount of cash and the number of and value of the shares of the Company’s common stock, if any, noteholders would receive upon conversion of the Notes.
The Company also expects to repurchase up to
This press release is not an offer to repurchase the 2026 Notes or any shares of the Company’s common stock and the Offering of the Notes is not contingent upon the 2026 Notes repurchases or the share repurchases described above.
The offer and sale of the Notes and the shares of the Company’s common stock, if any, issuable upon conversion of the Notes have not been registered under the Securities Act or any state securities laws, and the Notes and such shares may not be offered or sold absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state laws.
This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, 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 thereof under the securities laws of such jurisdiction. Any offers of the Notes will be made only by means of a private offering memorandum. The Notes being offered have not been approved or disapproved by any regulatory authority, nor has any such authority passed upon the accuracy or adequacy of the applicable private offering memorandum.
Proposed Credit Facility
The Company is launching a proposed senior secured Term Loan B due 2032 in an aggregate principal amount of
The terms of the Proposed Credit Facility will be disclosed upon completion of the transactions. There can be no assurances that the Company will be successful in its marketing efforts or that it will be able to enter into the Proposed Credit Facility. Closing of the Proposed Credit Facility, which is anticipated to occur before the end of the first quarter of 2025, is subject to market conditions, as well as the negotiation and execution of definitive documents and the satisfaction of customary closing conditions.
About LCI Industries
LCI Industries (NYSE: LCII), through its Lippert subsidiary, is a global leader in supplying engineered components to the outdoor recreation and transportation markets. We believe our innovative culture, advanced manufacturing capabilities, and dedication to enhancing the customer experience have established Lippert as a reliable partner for both OEM and aftermarket customers.
Forward-Looking Statements
This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements in this press release that are not historical facts are “forward-looking statements” for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act, and include statements concerning the proposed terms of the Notes, the convertible note hedge transactions and warrant transactions to be entered into in connection with the Offering, the potential repurchase of a portion of the 2026 Notes, the potential unwinding of a portion of the Existing Call Spread Transactions, the potential repurchase of shares of the Company’s common stock, the proposed term loan financing, the completion, timing and size of the proposed transactions and the anticipated use of proceeds thereof.
A number of factors could cause actual results to differ materially from these statements, including, risks relating to the Offering, general economic uncertainty in key markets, the impacts of future pandemics, geopolitical tensions, armed conflicts, or natural disasters on the global economy and on the Company's customers, suppliers, employees, business and cash flows, pricing pressures due to domestic and foreign competition, costs and availability of, and tariffs on, raw materials (particularly steel and aluminum) and other components, seasonality and cyclicality in the industries to which we sell our products, availability of credit for financing the retail and wholesale purchase of products for which we sell our components, inventory levels of retail dealers and manufacturers, availability of transportation for products for which we sell our components, the financial condition of our customers, the financial condition of retail dealers of products for which we sell our components, retention and concentration of significant customers, the costs, pace of and successful integration of acquisitions and other growth initiatives, availability and costs of production facilities and labor, team member benefits, team member retention, realization and impact of expansion plans, efficiency improvements and cost reductions, the disruption of business resulting from natural disasters or other unforeseen events, the successful entry into new markets, the costs of compliance with environmental laws, laws of foreign jurisdictions in which we operate, other operational and financial risks related to conducting business internationally, and increased governmental regulation and oversight, information technology performance and security, the ability to protect intellectual property, warranty and product liability claims or product recalls, interest rates, oil and gasoline prices, and availability, the impact of international, national and regional economic conditions and consumer confidence on the retail sale of products for which we sell our components, and other risks and uncertainties discussed more fully under the caption “Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, and in the Company's subsequent filings with the Securities and Exchange Commission. Readers of this press release are cautioned not to place undue reliance on these forward-looking statements, since there can be no assurance that these forward-looking statements will prove to be accurate. The Company disclaims any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250310939746/en/
Contact: Lillian D. Etzkorn, CFO
Phone: (574) 535-1125
E Mail: LCII@lci1.com
Source: LCI Industries
FAQ
What is the size and maturity of LCI Industries' new convertible notes offering?
How does LCII plan to use the proceeds from the convertible notes offering?
What is the structure of LCII's proposed new credit facility?
When will LCII's proposed credit facility close?
