Verisk Analytics, Inc. Prices Offering of Senior Notes

Rhea-AI Summary

Verisk Analytics (Nasdaq: VRSK) announced the pricing of a $600 million offering of 5.250% Senior Notes due 2034. The closing is expected on June 5, 2024, pending customary conditions. The company plans to use part of the net proceeds to purchase its outstanding 4.000% Notes due 2025 through a tender offer, with a cap of $400 million. The remaining proceeds will be used for general corporate purposes. BofA Securities and HSBC Securities are joint book-running managers for the offering. The Senior Notes are being offered under an effective shelf registration statement filed with the SEC.

Positive

• Successful pricing of $600 million of 5.250% Senior Notes due 2034.
• Intended use of proceeds to repurchase 4.000% Notes due 2025, potentially reducing future interest expenses.
• Remaining proceeds allocated for general corporate purposes, providing financial flexibility.
• BofA Securities and HSBC Securities as joint book-running managers, indicating strong institutional support.

Negative

• Issuance of new debt increases overall financial leverage, raising long-term liabilities.
• Repurchasing existing 4.000% Notes due 2025 requires additional cash outflow, impacting liquidity.
• Potential market perception of increasing debt might pressure stock prices negatively.

Insights

Financial Analyst

Verisk Analytics' recent announcement regarding the pricing of $600 million of 5.250% Senior Notes due 2034 has significant implications for the company's financial structure. The decision to issue senior notes at a 5.25% interest rate reflects the company's strategy to manage its debt profile more efficiently. Notably, a portion of the proceeds will be used to fund the purchase of up to $400 million of the company's outstanding 4.000% Notes due 2025. By refinancing the 2025 Notes at a higher interest rate, Verisk aims to extend the maturity of its debt, albeit at a higher cost in terms of interest payments.

From a financial perspective, this move can be viewed as a way to stabilize cash flows and manage upcoming debt maturities more effectively. However, the increased interest expense could put some pressure on profitability in the short term. Long-term, the company’s financial flexibility improves, but investors should weigh the cost implications carefully.

Market Research Analyst

Issuing new senior notes, especially with a sizable amount of $600 million, indicates Verisk’s confidence in its financial health and market position. The tender offer for the 2025 Notes also suggests that the company is proactive in managing its debt profile, reducing near-term obligations and making use of current market conditions to secure longer-term funding. This can be seen as a strategic move to ensure liquidity and operational stability.

Retail investors should consider how this debt restructuring might influence Verisk’s future growth initiatives and capital allocation. The company's decision to earmark remaining proceeds for general corporate purposes might signal potential investments in growth areas or other strategic ventures. However, the elevated interest rate on the new notes could be a double-edged sword, ensuring immediate stability at the cost of increased long-term financial obligations.

JERSEY CITY, N.J., May 21, 2024 (GLOBE NEWSWIRE) -- Verisk Analytics, Inc. (Nasdaq: VRSK) (“Verisk” or the “Company”), a leading global data analytics and technology provider, today announced the pricing of an offering of $600 million of 5.250% Senior Notes due 2034 (the “Notes”). The closing of the offering is expected to occur on June 5, 2024, subject to satisfaction of customary closing conditions.

The Company intends to use a portion of the net proceeds of this offering to fund the purchase of the Company’s outstanding 4.000% Notes due 2025 (the “2025 Notes”) accepted pursuant to the tender offer (the “Tender Offer”) to purchase for cash up to $400,000,000 aggregate principal amount of the 2025 Notes and the payment of related fees and expenses. The Company intends to use the remaining net proceeds not applied in the Tender Offer for general corporate purposes. The Tender Offer is conditioned upon, among other things, the completion of the offering of the Notes; however, the closing of the offering of the Notes is not conditioned on the consummation of the Tender Offer.

BofA Securities, Inc. and HSBC Securities (USA) Inc. are acting as joint book-running managers for the offering.

The offering of these securities is made only by means of a prospectus. Copies may be obtained by contacting BofA Securities, Inc., One Bryant Park, New York, NY 10036 Attn: Prospectus Department, e-mail dg.prospectus_requests@baml.com; or HSBC Securities (USA) Inc., 66 Hudson Boulevard, New York, NY 10001 at 1-866-811-8049. The Notes are being offered pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission on March 24, 2023.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the Notes, nor will there be any sale of the Notes in any jurisdiction in which such offer, solicitation, or sale would be unlawful. Any offer, solicitation or sale of the Notes will be made only by means of the prospectus supplement and the accompanying prospectus.

About Verisk

Verisk (Nasdaq: VRSK) is a leading strategic data analytics and technology partner to the global insurance industry. It empowers clients to strengthen operating efficiency, improve underwriting and claims outcomes, combat fraud and make informed decisions about global risks, including climate change, extreme events, ESG and political issues. Through advanced data analytics, software, scientific research and deep industry knowledge, Verisk helps build global resilience for individuals, communities and businesses. With teams across more than 20 countries, Verisk consistently earns certification by Great Place to Work and fosters an inclusive culture where all team members feel they belong.

Forward-Looking Statements

This press release contains forward-looking statements. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause the Company’s actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “target,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these terms or other comparable terminology. You should not place undue reliance on forward-looking statements, because they involve known and unknown risks, uncertainties, and other factors that are, in some cases, beyond the Company’s control and that could materially affect actual results, levels of activity, performance, or achievements.

Other factors that could materially affect actual results, levels of activity, performance, or achievements can be found in the Company’s quarterly reports on Form 10-Q, annual reports on Form 10-K, and current reports on Form 8-K filed with the Securities and Exchange Commission. If any of these risks or uncertainties materialize or if the Company’s underlying assumptions prove to be incorrect, actual results may vary significantly from what the Company projected. Any forward-looking statement in this release reflects the Company’s current views with respect to future events and is subject to these and other risks, uncertainties, and assumptions relating to the Company’s operations, results of operations, growth strategy, and liquidity. The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise.

FAQ

What is the amount of Verisk Analytics' new Senior Notes offering?

Verisk Analytics' new Senior Notes offering amounts to $600 million.

What is the interest rate on Verisk Analytics' new Senior Notes due 2034?

The interest rate on Verisk Analytics' new Senior Notes due 2034 is 5.250%.

When is the expected closing date for Verisk Analytics' Senior Notes offering?

The expected closing date for Verisk Analytics' Senior Notes offering is June 5, 2024.

How will Verisk Analytics use the proceeds from the Senior Notes offering?

Verisk Analytics plans to use the proceeds to repurchase its 4.000% Notes due 2025 and for general corporate purposes.

Who are the joint book-running managers for Verisk Analytics' Senior Notes offering?

BofA Securities and HSBC Securities are the joint book-running managers for Verisk Analytics' Senior Notes offering.