Resideo Announces Offering of Senior Unsecured Notes
Resideo Technologies (NYSE: REZI) has announced a private offering of $500 million in Senior Notes due 2032 through its subsidiary, Resideo Funding. These notes will be fully guaranteed by Resideo and its subsidiaries. The proceeds will be used to repay part of the outstanding senior secured Term B loans maturing in 2028. The offering targets qualified institutional buyers and non-U.S. investors under Rule 144A and Regulation S of the Securities Act of 1933. The securities won't be registered under the Securities Act or state laws and can't be sold unless exempt from registration requirements.
- Resideo is addressing its debt by using proceeds from the $500 million Notes offering to repay part of its senior secured Term B loans.
- The Senior Notes due 2032 will be fully and unconditionally guaranteed by Resideo and its subsidiaries, which could enhance investor confidence.
- The private offering of the $500 million Senior Notes is not registered under the Securities Act, limiting their liquidity and marketability.
Resideo Technologies' announcement of a
However, it's important to consider the interest rate environment. If interest rates are rising, the cost of borrowing could be higher, which would impact Resideo's financials negatively over time. Conversely, if the notes carry a lower interest rate than the existing debt, this could reduce their interest expenses, thus positively affecting the company's earnings in the long term.
This type of move could also indicate that Resideo sees stable or improving cash flows, as they are willing to take on long-term debt with confidence in their future financial position. For investors, a stable or optimized debt structure is generally positive, as it may lead to improved credit ratings and lower risk of financial distress.
From a market perspective, the issuance of Senior Notes secured against the company's existing senior credit facilities demonstrates a level of confidence from Resideo in the market's reception of this financial instrument. This could be interpreted as a sign that the company perceives its current financial health and market position as strong enough to attract institutional investors. Institutional investors' confidence can often translate into positive sentiment in the stock market, potentially boosting stock prices in the short term.
It's essential to recognize the targeted audience for this offering – qualified institutional buyers and non-U.S. investors. This indicates that the company is leveraging Rule 144A and Regulation S, which are commonly used mechanisms to raise capital quickly and efficiently without the need for extensive public disclosure typically required for public offerings. For retail investors, this means less transparency compared to public offerings, but it also hints at a streamlined process aimed at sophisticated investors.
The Company intends to use the net proceeds from the sale of the Notes to repay a portion of the outstanding indebtedness under the Company's senior secured Term B loans maturing on February 21, 2028.
The Notes are being offered only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and outside
This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the Notes, the related guarantees or any other security, and shall not constitute an offer, solicitation or sale of any securities in any state or jurisdiction in which, or to any persons to whom, such offering, solicitation or sale would be unlawful.
About Resideo
Resideo is a leading global manufacturer and developer of technology-driven products and components that provide critical comfort, energy management, and safety and security solutions to over 150 million homes globally. Through our ADI Global Distribution business, we are also a leading wholesale distributor of professionally installed electronic security and life safety products for commercial and residential markets and serve a variety of adjacent product categories including audio visual, data communications, and smart home solutions.
Forward-Looking Statements
This release contains "forward-looking statements," including statements relating to the proposed offering and the anticipated use of the net proceeds from the offering. All statements, other than statements of fact, that address activities, events or developments that we or our management intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risks and uncertainties, which may cause the actual results or performance of the Company to differ materially from such forward-looking statements. Such risks and uncertainties include, but are not limited to, (1) our ability to achieve our outlook regarding the second quarter 2024 and full year 2024, (2) our ability to recognize the expected savings from, and the timing and impact of, our existing and anticipated cost reduction actions, and our ability to optimize our portfolio and operational footprint, (3) the amount of our obligations and nature of our contractual restrictions pursuant to, and disputes that have or may hereafter arise under the agreements we entered into with Honeywell International Inc. in connection with our spin-off, (4) risks related to our recently completed acquisitions including our ability to achieve the targeted amount of annual cost synergies and successfully integrate the acquired operations (including successfully driving category growth in connected offerings), (5) the ability of Resideo to drive increased customer value and financial returns and enhance strategic and operational capabilities as a result of the completion of the Snap One Holdings Corp. ("Snap One") transaction, (6) the ability of Resideo to achieve the targeted amount of synergies and the related valuation implications arising from the Snap One transaction, (7) the accretive nature of the Snap One transaction to Resideo's non-GAAP EPS in the first full year of ownership and the growth and margin profile of the combined businesses, (8) the ability to accelerate brand strategy as a result of the Snap One transaction, (9) the ability to integrate the Snap One business into Resideo and realize the anticipated strategic benefits of the transaction, including the anticipated operational and strategic benefits of the transaction, and (10) the other risks described under the headings "Risk Factors" and "Cautionary Statement Concerning Forward-Looking Statements" in our Annual Report on Form 10-K for the year ended December 31, 2023 and other periodic filings we make from time to time with the Securities and Exchange Commission. Forward-looking statements are not guarantees of future performance, and actual results, developments, and business decisions may differ from those envisaged by our forward-looking statements. Except as required by law, we undertake no obligation to update such statements to reflect events or circumstances arising after the date of this press release and we caution investors not to place undue reliance on any such forward-looking statements.
Contacts:
Resideo Investors:
Jason Willey
Vice President, Investor Relations
investorrelations@resideo.com
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SOURCE Resideo Technologies, Inc.
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