WEX Announces Proposed $500 Million Senior Unsecured Notes Offering
WEX Inc. (NYSE: WEX) has announced a private offering of $500 million in senior unsecured notes due 2033. The company plans to use the proceeds, along with a proposed $500 million incremental term loan B facility and cash on hand, to fund:
- A tender offer to purchase company shares for up to $750 million
- Repayment of approximately $250 million outstanding under the revolving credit facility
- Related fees and expenses
The notes will be guaranteed by WEX's wholly-owned domestic subsidiaries that guarantee the company's senior secured credit facilities. The offering is not conditioned on completing either the incremental term loan or tender offer. If the tender offer is not completed, proceeds may be used for general corporate purposes, including credit facility repayments and stock repurchases.
WEX Inc. (NYSE: WEX) ha annunciato un'offerta privata di 500 milioni di dollari in note senior non garantite con scadenza nel 2033. L'azienda prevede di utilizzare i proventi, insieme a un prestito termico incrementale B di 500 milioni di dollari proposto e a liquidità disponibile, per finanziare:
- Un'offerta di acquisto di azioni aziendali fino a 750 milioni di dollari
- Il rimborso di circa 250 milioni di dollari dovuti nell'ambito della linea di credito revolving
- Spese e commissioni correlate
Le note saranno garantite dalle sussidiarie domestiche interamente possedute da WEX che garantiscono le strutture di credito senior garantite dell'azienda. L'offerta non è condizionata al completamento né del prestito termico incrementale né dell'offerta di acquisto. Se l'offerta di acquisto non viene completata, i proventi possono essere utilizzati per scopi aziendali generali, inclusi i rimborsi delle linee di credito e i riacquisti di azioni.
WEX Inc. (NYSE: WEX) ha anunciado una oferta privada de 500 millones de dólares en notas senior no garantizadas con vencimiento en 2033. La empresa planea utilizar los ingresos, junto con un préstamo termal incremental B de 500 millones de dólares propuesto y efectivo disponible, para financiar:
- Una oferta de compra de acciones de la empresa por hasta 750 millones de dólares
- El reembolso de aproximadamente 250 millones de dólares pendientes bajo la línea de crédito revolving
- Honorarios y gastos relacionados
Las notas estarán garantizadas por las subsidiarias nacionales de propiedad total de WEX que garantizan las instalaciones de crédito senior garantizadas de la empresa. La oferta no está condicionada a la finalización del préstamo termal incremental ni de la oferta de compra. Si la oferta de compra no se completa, los ingresos pueden utilizarse para fines corporativos generales, incluidos los reembolsos de la línea de crédito y la recompra de acciones.
WEX Inc. (NYSE: WEX)는 2033년 만기인 5억 달러 규모의 비담보 선순위 채권을 사모로 발행한다고 발표했습니다. 회사는 이 수익금을 제안된 5억 달러 규모의 추가 대출 B 시설 및 보유 현금과 함께 사용하여 다음을 자금 지원할 계획입니다:
- 회사의 주식을 최대 7억 5천만 달러에 매입하는 입찰 제안
- 회전 신용 시설에서 약 2억 5천만 달러를 상환
- 관련 수수료 및 비용
채권은 회사의 선순위 담보 신용 시설을 보증하는 WEX의 완전 소유 국내 자회사가 보증합니다. 이 제안은 추가 대출이나 입찰 제안 완료에 조건을 두지 않습니다. 만약 입찰 제안이 완료되지 않을 경우, 수익금은 신용 시설 상환 및 주식 재매입을 포함한 일반 기업 용도로 사용될 수 있습니다.
WEX Inc. (NYSE: WEX) a annoncé une offre privée de 500 millions de dollars en obligations senior non garanties arrivant à échéance en 2033. La société prévoit d'utiliser les produits, ainsi qu'un prêt à terme B supplémentaire de 500 millions de dollars proposé et des liquidités disponibles, pour financer :
- Une offre de rachat d'actions de l'entreprise jusqu'à 750 millions de dollars
- Le remboursement d'environ 250 millions de dollars dus au titre de la facilité de crédit renouvelable
- Les frais et dépenses connexes
Les obligations seront garanties par les filiales nationales entièrement détenues par WEX qui garantissent les facilités de crédit senior garanties de l'entreprise. L'offre n'est pas conditionnée à l'achèvement du prêt à terme supplémentaire ou de l'offre de rachat. Si l'offre de rachat n'est pas réalisée, les produits peuvent être utilisés à des fins corporatives générales, y compris le remboursement des facilités de crédit et le rachat d'actions.
WEX Inc. (NYSE: WEX) hat ein privates Angebot von 500 Millionen Dollar an unbesicherten vorrangigen Anleihen mit Fälligkeit im Jahr 2033 angekündigt. Das Unternehmen plant, die Erlöse zusammen mit einem vorgeschlagenen 500 Millionen Dollar zusätzlichen Terminkredit B und vorhandenen liquiden Mitteln zu verwenden, um Folgendes zu finanzieren:
- Ein Übernahmeangebot zum Kauf von Unternehmensaktien von bis zu 750 Millionen Dollar
- Die Rückzahlung von etwa 250 Millionen Dollar, die unter der revolvierenden Kreditfazilität ausstehen
- Verwandte Gebühren und Ausgaben
Die Anleihen werden von den vollständig im Besitz von WEX befindlichen inländischen Tochtergesellschaften garantiert, die die vorrangigen gesicherten Kreditfazilitäten des Unternehmens garantieren. Das Angebot ist nicht an den Abschluss des zusätzlichen Terminkredits oder des Übernahmeangebots gebunden. Falls das Übernahmeangebot nicht abgeschlossen wird, können die Erlöse für allgemeine Unternehmenszwecke verwendet werden, einschließlich der Rückzahlung von Kreditfazilitäten und Aktienrückkäufen.
- Large-scale share repurchase program of $750M indicates strong confidence in company value
- Debt refinancing and restructuring could improve financial flexibility
- Strong ability to raise substantial capital ($1B) through debt markets
- Significant increase in debt burden with $1B new financing
- Higher interest expenses from new debt could impact future earnings
- Substantial leverage increase could affect credit ratings
Insights
WEX's $500M Notes Offering Signals Strategic Financial Restructuring
WEX's announcement of a $500 million senior unsecured notes offering, combined with a proposed $500 million incremental term loan, represents a significant financial restructuring that merits careful analysis. This $1 billion debt raise will primarily fund a $750 million tender offer for the company's common stock—potentially retiring approximately 13% of outstanding shares at current market prices.
This financial engineering reveals management's confidence in WEX's future cash flow generation capacity. By leveraging the balance sheet to reduce share count, WEX is effectively signaling that they view their equity as undervalued while simultaneously creating a more efficient capital structure. The mathematical impact on EPS could be substantial—reducing share count by 13% while increasing interest expense by approximately $50-60 million annually (assuming a 5-6% blended interest rate).
The timing is particularly noteworthy. With WEX trading at approximately 14x forward earnings—below historical averages—management appears to be seizing an opportunity to create shareholder value through financial optimization rather than purely operational means. The debt markets are also relatively favorable for investment-grade issuers despite recent rate volatility.
However, this strategy carries meaningful risks. WEX's debt-to-EBITDA ratio will likely increase from roughly 2.5x to approximately 3.5-4.0x, potentially pressuring credit ratings and increasing borrowing costs. The company is also sacrificing financial flexibility that could otherwise be directed toward acquisitions in its fragmented industry or organic growth initiatives.
The structure of the tender offer versus open market repurchases suggests management is seeking to execute this share reduction efficiently and quickly, potentially minimizing market impact. The tender approach typically offers a premium to current market prices, which could represent an attractive exit opportunity for certain shareholders.
This transaction ultimately represents a calculated bet by WEX management that the company's future cash flows will comfortably service this additional debt while delivering enhanced returns to remaining shareholders through increased EPS and potential multiple expansion. Investors should monitor execution closely, particularly the tender participation rate and subsequent operational performance against this higher fixed cost base.
WEX's $1B Debt Strategy: Exchanging Financial Flexibility for Shareholder Returns
WEX's announcement of a $500 million senior unsecured notes offering, paired with a $500 million term loan, represents a pivotal shift in capital allocation strategy that will fundamentally transform the company's financial profile. This $1 billion debt-fueled initiative to repurchase $750 million of common stock (approximately 13% of outstanding shares) reveals several critical strategic insights.
The financial mathematics are compelling but introduce significant leverage. WEX currently maintains a debt-to-EBITDA ratio around 2.7x based on TTM EBITDA of approximately $1.1 billion. This transaction would likely push leverage toward 3.7-4.0x, substantially higher than historical norms and potentially approaching levels that could trigger credit rating concerns. The annual interest burden could increase by $50-60 million, consuming roughly 5% of the company's operating income.
The choice of a tender offer rather than an open market repurchase program signals urgency and conviction. Tender offers typically include a premium to current market prices (often 5-15%), suggesting management believes even a premium represents good value. This approach also allows for more rapid share count reduction compared to traditional buyback programs that might take several quarters to execute.
Market timing appears opportunistic from multiple angles. WEX shares have traded at a discount to historical valuation averages recently, while debt markets remain accessible despite rising rate environments. The 2033 maturity for the notes strategically pushes repayment obligations well into the future, providing operational runway while capitalizing on the current debt market window.
This financial engineering reveals management's assessment that WEX's intrinsic value exceeds current market valuation. However, it also suggests potential limitations in high-return organic growth opportunities or strategic acquisitions that might otherwise absorb this capital. The willingness to substantially increase leverage indicates exceptional confidence in the stability and predictability of future cash flows.
For investors, this transaction creates a more concentrated bet on WEX's execution. While EPS will likely increase mechanically through share count reduction, the higher fixed costs from interest expenses reduce financial flexibility and increase operational risk. The success of this strategy ultimately depends on WEX's ability to grow EBITDA fast enough to return leverage to more sustainable levels within a reasonable timeframe while delivering the enhanced shareholder returns this financial restructuring promises.
The timing of pricing and terms of the Notes are subject to market conditions and other factors. The Company intends to use the net proceeds of the Offering, together with the net proceeds of borrowings under a proposed new incremental term loan B facility in an aggregate principal amount of
Nothing contained herein shall constitute an offer to sell or the solicitation of an offer to buy the Notes or any other securities nor shall there be any offer, solicitation or sale of the Notes or any other securities in any state in which such offer, solicitation or sale would be unlawful. The Notes are being offered only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act, and outside
This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act.
Forward-Looking Statements
This press release contains forward-looking statements including, but not limited to, statements about management’s plans, goals and expectations with respect to the Offering and the use of proceeds therefrom. Any statements in this press release that are not statements of historical facts are forward-looking statements. When used in this press release, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” “positions,” “confidence,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. Forward-looking statements relate to the Company’s future plans, objectives, expectations, and intentions and are not historical facts and accordingly involve known and unknown risks and uncertainties and other factors that may cause the actual results or performance to be materially different from future results or performance expressed or implied by these forward-looking statements, including the Company’s ability to successfully market and consummate the Offering on the terms described or at all, such that such Offering does not close or is not as successful as it is intended to be, the use of proceeds therefrom, the Company’s ability to successfully market and consummate the Incremental Term Loan B facility on the terms described or at all and the Company’s ability to successfully consummate the Tender Offer on the terms described or at all; as well as other risks and uncertainties identified in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on February 20, 2025 and subsequent filings with the Securities and Exchange Commission. The forward-looking statements speak only as of the date of this press release and undue reliance should not be placed on these statements. The Company disclaims any obligation to update any forward-looking statements as a result of new information, future events, or otherwise.
All of the forward-looking information contained in this press release is expressly qualified by the foregoing cautionary statements.
About WEX
WEX (NYSE: WEX) is the global commerce platform that simplifies the business of running a business. WEX has created a powerful ecosystem that offers seamlessly embedded, personalized solutions for its customers around the world. Through its rich data and specialized expertise in simplifying benefits, reimagining mobility and paying and getting paid, WEX aims to make it easy for companies to overcome complexity and reach their full potential. For more information, please visit www.wexinc.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250224326450/en/
News Media:
WEX
Megan Zaroda, 610-379-6211
Megan.Zaroda@wexinc.com
Investor:
WEX
Steve Elder, 207-523-7769
Steve.Elder@wexinc.com
Source: WEX
FAQ
What is the size of WEX's new senior unsecured notes offering in 2033?
How much is WEX planning to spend on share repurchases through the tender offer?
What is the total debt financing WEX is seeking between notes and term loan?
How much debt will WEX repay from its revolving credit facility?
