Unisys Closes $700 Million Senior Secured Notes Offering
Unisys Corporation (NYSE: UIS) has recently completed an important milestone by securing $700 million through the offering of its 10.625% Senior Secured Notes due 2031. This significant financial move will safeguard the company’s future and enhance its financial stability.
Purpose of the Offering
The primary goal of this offering is to refinance existing debt. The net proceeds will be used to acquire outstanding 6.875% senior secured notes due 2027, which involves a comprehensive tender offer. This strategic decision is aimed at improving Unisys' overall financial robustness and securing favorable terms for repayment.
Supporting Its Pension Fund
In addition to refinancing debt, Unisys plans to allocate part of the proceeds towards its U.S. pension plan. This move ensures that the company is taking proactive steps to manage its long-term retirement obligations, thereby enhancing the financial security of its employees.
Comments from Leadership
Michael Thomson, the CEO and president of Unisys, expressed optimism regarding this closing. He stated, "The closing of the Senior Secured Notes offering is a significant milestone for Unisys, as it allows us to refinance our Existing Notes, partially fund our U.S. pension plan, and strengthen our financial position." Thomson emphasized that these steps are crucial for executing the company’s long-term vision while continuing to deliver value to clients.
Security and Guarantees
The Senior Secured Notes will be backed by guarantees from Unisys's material domestic subsidiaries. This security enhances the financial structure of the offering by pledging virtually all assets of Unisys and its subsidiaries, ensuring that investors' interests are well protected.
Extending ABL Credit Facility
Alongside the notes offering, Unisys has successfully amended its Asset-Based Lending (ABL) credit facility, now standing at $125 million in revolving commitments. With an added option for increasing these commitments up to $155 million, this amendment allows the company to maintain liquidity while extending the facility's maturity from October 2027 to June 2030. This extension not only supports operational needs but also provides flexibility for future growth initiatives.
Long-Term Outlook
Unisys is focused on overcoming market challenges and seizing opportunities for expansion. The measures taken through the Senior Secured Notes offering and the ABL credit facility adjustments align with its strategy to innovate within the tech solutions sector. As the company looks to its future, it remains devoted to strengthening its offerings in cloud computing, AI, and digital workplace solutions, ensuring they meet the evolving demands of their clientele.
About Unisys
Unisys is a dynamic global technology solutions provider. Over the past 150 years, the company has been a pivotal player in enhancing the capabilities of various organizations through transformative technology. Their expertise lies in cloud computing, AI, digital workplaces, and enterprise computing. This foundation empowers clients to challenge traditional norms and realize their true potential.
Frequently Asked Questions
What is the purpose of the $700 million offering?
The offering aims to refinance existing senior secured notes and support Unisys's U.S. pension plan as well as general corporate needs.
Who guarantees the Senior Secured Notes?
The Senior Secured Notes are guaranteed by Unisys's material domestic subsidiaries, ensuring the assets remain secured.
How will the pension plan be funded?
Part of the funds raised from the Senior Secured Notes will be allocated to managing the pension plan more effectively.
What changes were made to the ABL credit facility?
Unisys has extended the maturity of its ABL credit facility and adjusted revolving commitments, boosting financial flexibility.
What innovations is Unisys focusing on?
Unisys continues to innovate in areas like cloud solutions, AI, and digital workplaces to meet customer needs.
