Unisys Announces Pricing of $485 Million Private Offering of Senior Secured Notes; Net Proceeds to Be Used to Fund U.S. Pension Plans

Rhea-AI Summary

Unisys Corporation (NYSE: UIS) has priced $485 million in Senior Secured Notes due 2027, set to close on October 29, 2020. Proceeds will address its underfunded U.S. pension liability. The notes carry an interest rate of 6.875%, with payments starting on May 1, 2021. Guaranteed by major domestic subsidiaries, these notes are secured by substantially all of Unisys's assets. They are being offered privately under Rule 144A and Regulation S, and not registered under the Securities Act.

Positive

• The offering is intended to fund a portion of the underfunded U.S. pension liability, which may strengthen financial stability.
• Notes secured by liens on substantially all assets may offer investors enhanced security.

Negative

• The high interest rate of 6.875% could lead to increased financial burden on the company.
• Issuing new debt may lead to shareholder dilution and increased leverage.

BLUE BELL, Pa., Oct. 22, 2020 /PRNewswire/ -- Unisys Corporation (NYSE: UIS) ("Unisys") announced today the pricing of $485 million aggregate principal amount of Senior Secured Notes due 2027 (the "notes") through a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A and to certain persons outside of the United States pursuant to Regulation S, each under the Securities Act of 1933, as amended (the "Securities Act"). The offering of the notes is expected to close on October 29, 2020, subject to customary closing conditions. Unisys intends to use all of the net proceeds from the offering of the notes to fund a portion of its underfunded U.S. pension liability.

The notes will be guaranteed on a senior secured basis by material domestic subsidiaries of Unisys (the "subsidiary guarantors") on the issue date and, in the future, will be guaranteed by each U.S. domestic subsidiary that guarantees the company's ABL credit facility and by each restricted subsidiary that guarantees or becomes obligated as a co-issuer or co-borrower of certain capital markets debt issued or borrowed by Unisys or any subsidiary guarantor. The notes and the guarantees will be secured by liens on substantially all assets of Unisys and the subsidiary guarantors, which liens will be subordinated to the liens on ABL collateral in favor of the ABL secured parties and, in the future, may be subordinated to certain permitted first lien debt, subject to certain limitations and permitted liens.

The notes will be issued at par and will bear interest at a rate of 6.875% per year until maturity, payable semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2021.

The notes have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements of the Securities Act or the securities laws of any other jurisdiction.

This press release is neither an offer to sell nor a solicitation of an offer to buy any of these securities nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

About Unisys
Unisys is a global IT services company that delivers successful outcomes for the most demanding businesses and governments. Unisys offerings include digital workplace services, cloud and infrastructure services and software operating environments for high-intensity enterprise computing. Unisys integrates security into all of its solutions.

Forward-Looking Statements
Any statements contained in this release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding the completion by Unisys of the offering, and the anticipated use of proceeds by Unisys. These forward-looking statements are based on current assumptions, expectations and beliefs of Unisys and involve substantial risks and uncertainties that may cause actual results and the timing of events to materially differ from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, risks related to market and other general economic conditions, the ability of Unisys to meet the closing conditions required for the consummation of the offering and other risks detailed in filings Unisys makes with the SEC from time to time, including under the heading "Risk Factors" in Unisys' Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and its most recent Quarterly Report on Form 10-Q for the quarter ended June 30, 2020. Unisys assumes no obligation to update any forward-looking statements.

RELEASE NO.: 1022/9794

Unisys and other Unisys products and services mentioned herein, as well as their respective logos, are trademarks or registered trademarks of Unisys Corporation. Any other brand or product referenced herein is acknowledged to be a trademark or registered trademark of its respective holder.

UIS-C

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SOURCE Unisys Corporation

FAQ

What is the purpose of Unisys's $485 million Senior Secured Notes offering?

Unisys intends to use the net proceeds from the offering to fund a portion of its underfunded U.S. pension liability.

What are the interest terms for Unisys's Senior Secured Notes?

The notes will bear an interest rate of 6.875% per year, payable semiannually starting May 1, 2021.

When will the closing of Unisys's notes offering take place?

The offering is expected to close on October 29, 2020, subject to customary closing conditions.

Are Unisys's Senior Secured Notes registered under the Securities Act?

No, the notes have not been registered and may not be offered or sold in the U.S. absent registration or an exemption.