Pitney Bowes Announces Significant Progress on Deleveraging Initiative with Paydown of $100M of Oaktree Notes

Rhea-AI Summary

Pitney Bowes (NYSE: PBI) has repaid $100 million of its senior secured notes due 2028 issued by Oaktree Capital Management, reducing the balance from $272 million as of September 30, 2024. This repayment, funded by cash on hand, is part of the company's strategic deleveraging initiative. The move aims to reduce interest payments and free up capital for other value-enhancing initiatives. CEO Lance Rosenzweig indicated that the company plans to provide updates on retiring the remaining Oaktree 2028 Notes and further deleveraging efforts.

Positive

• Repaid $100M of debt using cash on hand
• Reduction in future interest payment obligations
• Progress in strategic deleveraging initiative

Negative

• Significant remaining debt balance of $172M on Oaktree Notes
• Use of cash reserves for debt repayment reduces available working capital

Insights

Financial Analyst

This debt reduction marks a significant milestone in Pitney Bowes' deleveraging strategy. The $100 million paydown represents approximately 37% of the outstanding Oaktree notes, demonstrating strong cash management and commitment to balance sheet improvement. The move will reduce annual interest expenses, improving free cash flow and financial flexibility.

The company's ability to fund this repayment from cash on hand indicates healthy liquidity. This strategic decision aligns with broader corporate restructuring efforts, including the GEC exit and cost reduction initiatives. The remaining $172 million balance of Oaktree notes still presents a significant leverage position, but management's proactive approach to debt reduction suggests a clear path toward improved financial health.

STAMFORD, Conn.--(BUSINESS WIRE)-- Pitney Bowes Inc. (NYSE: PBI) (“Pitney Bowes” or the “Company”), a technology-driven company that provides SaaS shipping solutions, mailing innovation, and financial services to clients around the world, today announced that it has repaid $100 million of the $275 million in senior secured notes (“2028 Notes”) issued by Oaktree Capital Management, L.P. (“Oaktree”), the balance of which was $272 million as of September 30, 2024. The partial payment of the 2028 Notes is part of the Company’s previously announced strategic initiative to deleverage its balance sheet. The repayment was funded by cash on hand.

Lance Rosenzweig, Pitney Bowes’ Chief Executive Officer, commented: “Our accelerated progress on our strategic initiatives of exiting GEC, reducing costs and optimizing our cash position is enabling us to take concrete steps to deleverage our balance sheet. The partial payment of our Oaktree 2028 Notes is the first step towards reducing interest payments and freeing up capital for other value-enhancing initiatives. We will have an update in the near-term on our plans to retire the remainder of the Oaktree 2028 Notes and continue to look for additional ways to deleverage as we build a more efficient and profitable organization.”

About Pitney Bowes

Pitney Bowes (NYSE: PBI) is a technology-driven company that provides SaaS shipping solutions, mailing innovation, and financial services to clients around the world – including more than 90 percent of the Fortune 500. Small businesses to large enterprises, and government entities rely on Pitney Bowes to reduce the complexity of sending mail and parcels. For the latest news, corporate announcements, and financial results, visit www.pitneybowes.com/us/newsroom. For additional information, visit Pitney Bowes at www.pitneybowes.com.

Forward-Looking Statements

This document contains “forward-looking statements” about the Company’s expected or potential future business and financial performance. Forward-looking statements include, but are not limited to, statements about the Company’s expectations related to the DRF bankruptcy proceedings, future revenue and earnings guidance, future events or conditions, and expected cost savings, elimination of future losses, and anticipated deleveraging in connection with Pitney Bowes’ announced strategic initiatives. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from those projected. Factors which could cause future financial performance to differ materially from expectations include, without limitation, declining physical mail volumes; changes in postal regulations or the operations and financial health of posts in the U.S. or other major markets or changes to the broader postal or shipping markets; the potential adverse effects and risks and uncertainties associated with the GEC exit and wind-down on the Company’s operations, management and employees, and the ability to successfully implement the Company’s 2024 worldwide cost reduction and optimization initiatives and realize the expected benefits therefrom, the loss of some of Pitney Bowes’ larger clients in the Presort Services segments; the loss of, or significant changes to, United States Postal Service (USPS) commercial programs, or the Company’s contractual relationships with the USPS or their performance under those contracts; and other factors as more fully outlined in the Company's 2023 Form 10-K Annual Report and other reports filed with the Securities and Exchange Commission during 2024. Pitney Bowes assumes no obligation to update any forward-looking statements contained in this document as a result of new information, events or developments.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241119569103/en/

Alex Brown

investorrelations@pb.com



OR



Longacre Square Partners

Joe Germani

jgermani@longacresquare.com

Source: Pitney Bowes Inc.

FAQ

How much debt did Pitney Bowes (PBI) repay to Oaktree Capital Management?

Pitney Bowes repaid $100 million of the senior secured notes issued by Oaktree Capital Management.

What was the remaining balance of Pitney Bowes' (PBI) Oaktree Notes as of September 30, 2024?

The remaining balance of the Oaktree Notes was $272 million as of September 30, 2024.

How did Pitney Bowes (PBI) fund the $100M debt repayment?

Pitney Bowes funded the $100 million debt repayment using cash on hand.