OUTFRONT Media announced yesterday that two of its wholly-owned subsidiaries priced a private offering of $500.0 million in aggregate principal amount of 4.250% Senior Notes due 2029 (the “notes”). The notes are to be sold at an issue price of 100.0% of the principal amount. The offering is expected to close on January 19, 2021, subject to customary closing conditions.
OUTFRONT intends to use the net proceeds from the notes offering, together with cash on hand, to redeem all of its outstanding 5.625% Senior Notes due 2024 (the “2024 notes”) and to pay accrued and unpaid interest on the 2024 notes, if any, to, but excluding, the redemption date, and to pay fees and expenses in connection with the notes offering and the 2024 notes redemption.
Insider’s Take: Does this sound familiar? It should as Lamar announced their refinancing last week. Comparing the two:
| OUTFRONT | Lamar | |||
| New Offering | ||||
| Loan Amount | $500 Million | $550 Million | ||
| Interest Rate | 4.25% | 3.625% | ||
| Maturity | 2029 | 2031 | ||
| Replaces | ||||
| Loan Amount | $500 Million | $650 Million | ||
| Interest Rate | 5.625% | 5.75% | ||
| Maturity | 2024 | 2026 | ||
| Interest Rate Spread | 1.375% | 2.125% | ||
| Approx. Interest Savings | $7 Million | $16 Million | ||
Both refinancings will bring considerable benefit to each company. Reduced interest rates, longer maturities and free cash available to the business for investment in operations or growth. Comparing the two, the private placement market determines rate and it is apparent that the market has more confidence in Lamar and it is reflected in their pricing.
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