QVC, Inc. Announces Private Exchange Offers for Any and All Outstanding 2027 Notes and 2028 Notes

Rhea-AI Summary

QVC, Inc. has launched private exchange offers for its outstanding 2027 and 2028 Notes. The exchange aims to improve QVC's credit profile by reducing debt balances and extending maturity. Eligible holders can exchange their old notes for new 6.875% Senior Secured Notes due April 2029 and cash. The exchange offers will expire on September 20, 2024, with settlement expected on September 25, 2024. The new notes will have identical restrictive covenants to the 2028 Notes and rank pari passu with existing QVC notes. A minimum of $300 million aggregate principal amount of new notes must be issued for the exchange to proceed. The offers are only available to qualified institutional buyers and non-U.S. persons outside the United States.

Positive

• Potential improvement in QVC's credit profile
• Extension of debt maturity profile
• Reduction of debt balances
• Support for potential extension of existing senior secured credit facility

Negative

• Increased interest rate on new notes (6.875%) compared to old notes (4.750% and 4.375%)
• Exchange offers to qualified institutional buyers and non-U.S. persons
• Minimum issuance requirement of $300 million for new notes

Financial Analyst

QVC's exchange offer for its 2027 and 2028 notes is a strategic move to improve its financial position. The company is offering to swap these notes for new 6.875% Senior Secured Notes due 2029, along with cash for the 2027 notes. This transaction aims to reduce debt and extend QVC's maturity profile, which could potentially strengthen its credit standing.

The higher interest rate on the new notes (6.875% vs 4.75% and 4.375% on the old notes) reflects current market conditions and the company's credit risk. However, the extended maturity to 2029 provides QVC with more financial flexibility. The minimum issuance of $300 million in new notes suggests QVC is seeking significant participation in this exchange.

Notably, Liberty Interactive 's expected cash contribution indicates parent company support, which is generally positive for creditors. Overall, this refinancing effort demonstrates proactive management of QVC's capital structure, but also highlights potential liquidity or refinancing pressures.

Legal Expert

QVC's exchange offer is structured to comply with securities regulations, particularly Rule 144A and Regulation S of the Securities Act. The offer is to "qualified institutional buyers" and non-U.S. persons, which allows QVC to avoid the costly and time-consuming process of registering the new notes with the SEC.

The exchange offer's terms, including the no-action period for withdrawals and the use of a guaranteed delivery procedure, align with standard market practices. The pari passu ranking of the new notes with existing QVC notes maintains the current creditor hierarchy, which is important for existing noteholders.

It's important to note that this exchange offer does not seek bondholder consents for any amendments, suggesting that QVC is not attempting to modify any covenants or terms of the existing indentures. This approach may be viewed favorably by bondholders as it maintains their current protections.

Market Research Analyst

QVC's exchange offer reflects broader trends in the retail sector, where companies are actively managing their debt profiles amid challenging market conditions. The higher interest rate on the new notes (6.875%) compared to the old notes (4.75% and 4.375%) indicates the increased cost of capital for retailers in the current economic environment.

The company's focus on extending debt maturities suggests a cautious outlook on near-term market conditions and a desire to secure longer-term financing. This move may be partly driven by concerns about the sustainability of consumer spending and the ongoing shift to e-commerce, which has been accelerated by the pandemic.

Investor response to this offer will be a key indicator of market sentiment towards QVC and similar retailers. A high participation rate would signal confidence in QVC's long-term prospects, while low participation might suggest investor concerns about the company's future performance or preference for current terms.

WEST CHESTER, Pa.--(BUSINESS WIRE)-- QVC, Inc. (“QVC”) announced today that it has commenced an offer to exchange (the “Exchange Offers”) any and all of the outstanding notes listed in the table below (collectively, the “Old Notes”) for QVC’s newly-issued 6.875% Senior Secured Notes due April 2029 (the “New Notes”) and, as applicable, cash, on the terms and subject to the conditions set forth in the Offering Memorandum, on the date hereof (the “Offering Memorandum” and, together with the eligibility letter and the notice of guaranteed delivery, the “Exchange Offer Documents”). The Exchange Offers are intended to improve QVC’s credit profile by reducing debt balances and extending QVC’s maturity profile, both supporting a potential future extension of QVC and its affiliates’ existing senior secured credit facility.

In connection with the Exchange Offers, Liberty Interactive LLC, a wholly-owned subsidiary of Qurate Retail, Inc., which is the indirect parent of QVC, through its subsidiaries, is expected to contribute to QVC an amount in cash equal to the cash portion of the consideration offered to the holders of the Old Notes, minus $75 million which will be paid by QVC, immediately prior to the Settlement Date (as defined below).

Title of Series of Old Notes to be Tendered		Principal Amount Outstanding (mm)		CUSIP*		Title of Series of New Notes to be Issued		Total Exchange Consideration (per $1,000 principal amount of Old Notes)
4.750% Senior Secured Notes due 2027 (the “2027 Notes”)		$575		747262 AY9		6.875% Senior Secured Notes due April 2029		$350 principal amount of New Notes and $650 in cash
4.375% Senior Secured Notes due 2028 (the “2028 Notes”)		$500		747262 AZ6		6.875% Senior Secured Notes due April 2029		$1,000 principal amount of New Notes
* No representation is made as to the correctness or accuracy of the CUSIP number either as printed on the Old Notes or as contained in this press release, and reliance may be placed only on the other identification printed on the Old Notes. The CUSIP number is included herein solely for the convenience of the registered owners of the Old Notes.

The New Notes will mature on April 15, 2029 and accrue interest at a rate of 6.875% per annum starting on the Settlement Date. The New Notes’ restrictive covenants will be identical to the restrictive covenants in the 2028 Notes and the New Notes will rank pari passu in right of payment with all existing QVC notes. No consents are being solicited as part of the Exchange Offers.

The Exchange Offers will expire at 5:00 p.m., New York City time, on September 20, 2024 (as such time and date may be extended, the “Expiration Date”). Tendered Old Notes may be withdrawn at any time before the Expiration Date. The “Settlement Date” will promptly follow the Expiration Date and is expected to be September 25, 2024.

Upon the terms and subject to the conditions set forth in the Exchange Offer Documents, Eligible Holders (as defined below) who (i) validly tender and who do not validly withdraw Old Notes at or prior to the Expiration Date or (ii) deliver a properly completed and duly executed notice of guaranteed delivery and all other required documents at or prior to the Expiration Date and tender their Old Notes pursuant to the Exchange Offers at or prior to 5:00 p.m., New York City time, on the second business day after the applicable Expiration Date pursuant to guaranteed delivery procedures, expected to be September 24, 2024, will receive consideration in the Exchange Offers equal to the applicable Total Exchange Consideration listed in the table above, plus accrued and unpaid interest in cash from the last applicable interest payment date, to but excluding, the Settlement Date, subject in each case to the delivery of the certification to participate in the Exchange Offers, to tendering the applicable minimum denominations, and to Old Notes being accepted for exchange by QVC.

The Exchange Offers are being made solely by the Exchange Offer Documents and only to such persons and in such jurisdictions as is permitted under applicable law. The complete terms and conditions of the Exchange Offers will be set forth in the Exchange Offer Documents, each of which will be distributed to Eligible Holders in connection with the proposed Exchange Offers. Each Exchange Offer is subject to certain conditions, including that a minimum amount of $300 million aggregate principal amount of New Notes are issued in the Exchange Offers; however, QVC reserves the right, in its sole discretion, to waive this minimum condition. QVC may amend, extend or terminate each Exchange Offer in its sole discretion.

The Exchange Offers are being made only to holders of Old Notes that have certified, by submitting an instruction to the clearing system, that they are either (i) “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933, as amended or (ii) are located outside the United States and are not “U.S. persons” as defined in Rule 902 under the Securities Act (such holders, “Eligible Holders”). Non-U.S. persons may also be subject to additional eligibility criteria. Only Eligible Holders are authorized to participate in the Exchange Offers.

Holders of Old Notes are advised to check with any bank, securities broker or other intermediary through which they hold Old Notes as to when such intermediary would need to receive instructions from a beneficial owner in order for that beneficial owner to be able to participate in, or withdraw their instruction to participate in, an Exchange Offer, before the deadlines specified in the Exchange Offer Documents. The deadlines set by any such intermediary and The Depository Trust Company for the submission of tender instructions will be earlier than the relevant deadlines specified in the Exchange Offer Documents.

Holders of Old Notes that are not Eligible Holders may reach out to the information agent identified below for alternatives available to them.

The Exchange Offers are being made pursuant to the Exchange Offer Documents, copies of which may be requested from the information agent, D.F. King & Co., Inc., at (800) 628-8510 (Toll-Free) or (212) 269-5550, by email at QVC@dfking.com, or via the following web address: www.dfking.com/QVC.

This press release is for informational purposes only and does not constitute a notice of redemption under the optional redemption provisions of the indenture governing the Old Notes, nor does it constitute an offer to sell, or a solicitation of an offer to buy, any security, nor does it constitute a solicitation for an offer to purchase any security, including the Old Notes or the New Notes.

The New Notes have not been, and will not be, registered under the Securities Act or any state securities laws and, unless so registered, may not be re-offered or re-sold except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws.

Forward-Looking Statements

This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, statements about the Exchange Offers and their expected completion. These forward-looking statements involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including, without limitation, the ability to satisfy the conditions to the Exchange Offers. These forward-looking statements speak only as of the date of this press release, and QVC expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Please refer to the publicly filed documents of QVC, including the most recent Forms 10-K and 10-Q, for additional information about QVC and about the risks and uncertainties related to the business of QVC which may affect the statements made in this press release.

Source: Qurate Retail, Inc.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240910948158/en/

Shane Kleinstein

720-875-5432

QVC Media Relations

484-701-1647

Source: Qurate Retail, Inc.

FAQ

What are the terms of QVC's exchange offer for its 2027 and 2028 Notes?

QVC is offering to exchange its 2027 and 2028 Notes for new 6.875% Senior Secured Notes due April 2029 and cash. The 2027 Notes will receive $350 in new notes and $650 in cash per $1,000 principal, while the 2028 Notes will receive $1,000 in new notes per $1,000 principal.

When will QVC's exchange offer for QRTEA notes expire?

The exchange offer for QVC's notes (QRTEA) is set to expire at 5:00 p.m., New York City time, on September 20, 2024, unless extended.

What is the purpose of QVC's exchange offer for its outstanding notes?

The purpose of QVC's exchange offer is to improve its credit profile by reducing debt balances and extending its maturity profile, which supports a potential future extension of QVC and its affiliates' existing senior secured credit facility.

Who is eligible to participate in QVC's exchange offer for its notes?

The exchange offer is only available to 'qualified institutional buyers' as defined in Rule 144A under the Securities Act of 1933, and non-U.S. persons located outside the United States as defined in Rule 902 under the Securities Act.