SERVICE CORPORATION INTERNATIONAL ANNOUNCES PRICING OF SENIOR NOTES OFFERING

Rhea-AI Summary

Service International (NYSE: SCI) has announced the pricing of an underwritten public offering of $800 million aggregate principal amount of 5.75% Senior Notes due 2032. The offering is expected to close on September 17, 2024, subject to customary closing conditions. Wells Fargo Securities is acting as the lead joint book-running manager for the offering.

The company plans to use the net proceeds to repay outstanding loans under its revolving credit facility and cover related fees, interest, and expenses. The offering is being made through an effective shelf registration statement filed with the SEC. Interested parties can obtain the prospectus supplement and accompanying base prospectus from Wells Fargo Securities or the SEC website.

Positive

• Successful pricing of $800 million senior notes offering
• Repayment of outstanding loans under revolving credit facility
• Potential improvement in debt structure and liquidity

Negative

• Increase in long-term debt obligations
• Potential increase in interest expenses due to 5.75% interest rate on new notes

Financial Analyst

Service International's (SCI) $800 million senior notes offering at 5.75% interest rate, due 2032, is a significant financial move. This debt issuance allows SCI to refinance its revolving credit facility, potentially improving its debt structure and liquidity position.

The 5.75% interest rate seems relatively competitive in the current market environment, suggesting investor confidence in SCI's financial stability. However, investors should consider the long-term impact on the company's balance sheet and interest expenses. This offering could provide SCI with more financial flexibility, but it's important to monitor how effectively the company utilizes this capital to drive growth and shareholder value.

Market Research Analyst

SCI's decision to issue $800 million in senior notes reflects confidence in the funeral services sector's long-term stability. As the largest provider of funeral and cemetery services in North America, SCI's financial moves often signal broader industry trends.

The successful pricing of this offering, especially amidst economic uncertainties, suggests strong investor appetite for SCI's debt. This could indicate positive sentiment towards the company's business model and the death care industry's resilience. However, investors should carefully consider how this additional debt might affect SCI's financial flexibility and ability to navigate potential market downturns or regulatory changes in the coming years.

HOUSTON, Sept. 12, 2024 /PRNewswire/ -- Service Corporation International (NYSE: SCI) (the "Company") announces that it has priced an underwritten public offering of $800 million aggregate principal amount of 5.75% Senior Notes due 2032. The offering will be made by means of an underwritten public offering pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission (the "SEC"). The Company expects to close the sale of the notes on September 17, 2024, subject to the satisfaction of customary closing conditions.

The Company will use net proceeds from the offering to repay the outstanding loans under its revolving credit facility and pay related fees, interest and expenses.

Wells Fargo Securities is acting as the lead joint book-running manager for the offering.

The offering may be made only by means of a prospectus supplement and accompanying base prospectus. The prospectus supplement will be filed with the SEC and may be found on its website at www.sec.gov. When available, copies of the prospectus supplement relating to the public offering may be obtained from:

Wells Fargo Securities, LLC
550 S. Tryon Street, 5th Floor
Charlotte, NC 28202
Telephone: (704) 410-4874 (with such fax to be confirmed by telephone to (704) 410-4885)
Email: IBCMDCMLSHYLeveragedSyndicate@wellsfargo.com
Attention: Leverage Syndicate

This press release does not constitute an offer to sell or purchase, nor the solicitation of an offer to buy or an offer to sell, the securities described herein, nor shall there be any sale of securities in any state in which such offer, solicitation, purchase or sale would be unlawful. The notes will be offered only by means of a prospectus supplement and accompanying base prospectus.

Cautionary Statement on Forward-Looking Statements
The statements in this press release that are not historical facts are forward-looking statements made in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. These statements may be accompanied by words such as "believe", "estimate", "project", "expect", "anticipate", or "predict" that convey the uncertainty of future events or outcomes. These statements are based on assumptions that we believe are reasonable; however, many important factors could cause our actual consolidated results in the future to differ materially from the forward-looking statements made herein and in any other documents or oral presentations made by, or on behalf of, the Company. These factors include, among others, the following: our affiliated trust funds own investments in securities, which are affected by market conditions that are beyond our control; we may be required to replenish our affiliated funeral and cemetery trust funds to meet minimum funding requirements, which would have a negative effect on our earnings and cash flow; our ability to execute our strategic plan depends on many factors, some of which are beyond our control; we may be adversely affected by the effects of inflation; our results may be adversely affected by significant weather events, natural disasters, catastrophic events or public health crises; our credit agreements contain covenants that may prevent us from engaging in certain transactions; if we lose the ability to use surety bonding to support our preneed activities, we may be required to make material cash payments to fund certain trust funds; increasing death benefits related to preneed contracts funded through life insurance or annuity contracts may not cover future increases in the cost of providing a price-guaranteed service; the financial condition of third-party life insurance companies that fund our preneed contracts may impact our future revenue; unfavorable publicity could affect our reputation and business; our failure to attract and retain qualified sales personnel could have an adverse effect on our business and financial condition; we use a combination of insurance, self-insurance, and large deductibles in managing our exposure to certain inherent risks, therefore, we could be exposed to unexpected costs that could negatively affect our financial performance; declines in overall economic conditions beyond our control could reduce future potential earnings and cash flows and could result in future impairments to goodwill and/or other intangible assets; any failure to maintain the security of the information relating to our customers, their loved ones, our associates, and our vendors could damage our reputation, could cause us to incur substantial additional costs and to become subject to litigation, and could adversely affect our operating results, financial condition, or cash flow; our Canadian business exposes us to operational, economic, and currency risks; our level of indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, and may prevent us from fulfilling our obligations under our indebtedness; a failure of a key information technology system or process could disrupt and adversely affect our business; the funeral and cemetery industry is competitive; if the number of deaths in our markets declines, our cash flows and revenue may decrease; changes in the number of deaths are not predictable from market to market or over the short term; if we are not able to respond effectively to changing consumer preferences, our market share, revenue, and/or profitability could decrease; the continuing upward trend in life expectancy and the number of cremations performed in North America could result in lower revenue, operating profit, and cash flows; our funeral and cemetery businesses are high fixed-cost businesses; risks associated with our supply chain could materially adversely affect our financial performance; regulation and compliance could have a material adverse impact on our financial results; unfavorable results of litigation could have a material adverse impact on our financial statements; cemetery burial practice claims could have a material adverse impact on our financial results; the application of unclaimed property laws by certain states to our preneed funeral and cemetery backlog could have a material adverse impact on our liquidity, cash flows, and financial results; changes in taxation, or the interpretation of tax laws or regulations, as well as the inherent difficulty in quantifying potential tax effects of business decisions could have a material adverse effect on the results of our operations, financial condition, or cash flows; and other factors identified in our reports filed with the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

For further information on these and other risks and uncertainties, see our SEC filings, including our 2023 Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Copies of this document as well as other SEC filings can be obtained from our website at www.sci-corp.com. We assume no obligation and make no undertaking to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by us whether as a result of new information, future events, or otherwise.

About Service Corporation International
Service Corporation International (NYSE: SCI), headquartered in Houston, Texas, is North America's leading provider of funeral, cemetery and cremation services, as well as final-arrangement planning in advance, serving more than 600,000 families each year. Our diversified portfolio of brands provides families and individuals a full range of choices to meet their needs, from simple cremations to full life celebrations and personalized remembrances. Our Dignity Memorial® brand is the name families turn to for professionalism, compassion, and attention to detail that is second to none. At June 30, 2024, we owned and operated 1,490 funeral service locations and 492 cemeteries (of which 306 are combination locations) in 44 states, eight Canadian provinces, the District of Columbia, and Puerto Rico. For more information about Service Corporation International, please visit our website at www.sci-corp.com. For more information about Dignity Memorial®, please visit www.dignitymemorial.com. 

For additional information contact:  InvestorRelations@sci-us.com

Investors:

Allie O'Connor - Assistant Vice President / Investor Relations

(713) 525-9156

Trey Bocage - Director / Investor Relations

(713) 525-3454

Media:

Jay Andrew - Assistant Vice President / Corporate Communications

(713) 525-3468

 

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SOURCE Service Corporation International

FAQ

What is the size and interest rate of SCI's new senior notes offering?

Service International (SCI) has priced an $800 million aggregate principal amount of 5.75% Senior Notes due 2032.

When is the expected closing date for SCI's senior notes offering?

The offering is expected to close on September 17, 2024, subject to customary closing conditions.

How does SCI plan to use the proceeds from the senior notes offering?

SCI plans to use the net proceeds to repay outstanding loans under its revolving credit facility and pay related fees, interest, and expenses.

Who is the lead joint book-running manager for SCI's senior notes offering?

Wells Fargo Securities is acting as the lead joint book-running manager for the offering.