Spectrum Brands Holdings Inc. (SPB) has announced that its wholly-owned subsidiary, Spectrum Brands Inc., has successfully priced a private offering of $300 million in aggregate principal amount of 3.375% exchangeable senior notes due in 2029. This offering will be accessible exclusively to eligible purchasers.
The company intends to allocate the net proceeds from this offering in several ways: firstly, to cover the $21.6 million cost associated with entering into capped call transactions; secondly, to repurchase approximately $50 million worth of common stock of the parent company through privately negotiated transactions, conducted concurrently with the pricing of the exchangeable notes via one of the initial purchasers or their affiliates; and lastly, for general corporate purposes.
Moreover, Spectrum Brands has granted the initial purchasers a 13-day option, starting from the issuance date of the exchangeable notes, to buy up to an additional $50 million in aggregate principal amount of these notes, should the initial purchasers sell more than the initial total principal amount.
The transaction is anticipated to close around May 23, 2024, subject to customary closing conditions, with expected net proceeds of approximately $291.6 million for the company.