Lamar Prices $550 Million Debt Offering

Insider wants to introduce a new contributor to our website.  Ken Altena is a longtime commercial banker and out of home lender from Seattle, WA.    Here are Ken’s thoughts on the Lamar refinancing.

Ken Altena

On January 7, 2021, Lamar Media Corp., a wholly owned subsidiary of Lamar Advertising Company, agreed to sell $550 million of 3.625% Senior Notes due 2031 through an institutional private placement. This pricing continues Lamar’s trend of receiving the some of the lowest rates available for high yield corporate bonds. As Jay Johnson, EVP and Chief Financial Officer of Lamar, told me:

“This is a testament to Lamar’s business strategy and faith of the capital markets in the company.”

The offering is expected to close January 22, 2021.

Lamar intends to use the proceeds of this offering, together with cash on hand and advances under its ‎senior secured revolving credit facility and Accounts Receivable Securitization Program, to redeem ‎all of its outstanding $650 million 5.75% Senior Notes due 2026 at a premium of 102.875%.‎ According to Mr. Johnson, this will result in an annualized cash interest savings of almost $16 million. It also moves all of the maturities of Lamar’s term debt to 2027 and beyond.

Jay Johnson, Lamar EVP & CFO

Though a newer addition to Lamar senior management, Mr. Johnson and his financial team have been busy since his arrival at Lamar in late 2019. They have refinanced over $3 billion of debt with lower pricing, extended maturities, greatly reduced amortization, and less restrictive covenants. This has helped Lamar’s cash flow during the pandemic and has financially positioned the company nicely for the next decade.

On top of closing this offering, Lamar is wrapping up its 2020 financial reports. Lamar announced it will release its results for the fiscal year and fourth quarter ending December 31, 2020, on February 26, 2021.

 


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