Allegion Completes its Debt Refinancing, Migration to Investment Grade
October 03 2017 - 5:30PM
Business Wire
Allegion plc (NYSE: ALLE), a leading global provider of security
products and solutions, today announced that it has completed the
redemption of its outstanding $600 million high yield senior notes,
$300 million of 5.750 percent notes due 2021, and $300 million of
5.875 percent notes due 2023. In addition, on Oct. 2, 2017,
Allegion closed its previously announced new bond offering of $400
million aggregate principal amount of 3.200 percent senior notes
due 2024 and $400 million aggregate principal amount of 3.550
percent senior notes due 2027. The issuance of the new senior
notes, the redemption of the high yield senior notes from the
proceeds of such issuance, as well as the refinancing of the
company’s credit facility announced on Sept. 12, 2017, completes
Allegion’s refinancing, resulting in the company having a fully
investment grade capital structure.
“Completing the debt refinancing and the migration to investment
grade results in significantly lower interest expense and increased
cash flows for the benefit of our shareholders,” said Patrick
Shannon, Allegion senior vice president and chief financial
officer. “These steps reduce our cost of capital and future
borrowing costs, which enhance our ability to fund accelerated
organic growth as well as future acquisitions.”
Allegion now has outstanding indebtedness of approximately $1.5
billion, consisting of a $700 million unsecured term loan facility
due 2022, $400 million of 3.200 percent senior notes due 2024, and
$400 million of 3.550 percent senior notes due 2027. The company
also has an undrawn $500 million revolving credit facility.
“Achieving an investment grade profile demonstrates our
financial strength and strong cash flow characteristics. It also
positions Allegion well to continue to execute our long-term
strategy and enhance shareholder value,” Shannon added.
As previously announced, the company expects to recognize, in
2017, a pre-tax charge of approximately $47 million ($0.43 per
share), associated with the debt refinancing, which includes a cash
redemption premium of $33 million, as well as the write-off of
previously capitalized debt issue costs and other transaction
expenses. In addition, the company expects that it will realize
approximately $13 million in pre-tax, annualized interest expense
savings ($0.09 per share), as a result of the new capital
structure.
This press release is for informational purposes only and shall
not constitute an offer to sell, or the solicitation of an offer to
buy, any securities, nor will there be any sales of securities
mentioned in this news release in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such
jurisdiction. You may obtain the registration statement (including
the accompanying prospectus, the related prospectus supplement and
the information incorporated by reference therein) relating to the
bond offering for free by visiting EDGAR on the SEC website at
www.sec.gov. Alternatively, copies may also be obtained by
contacting J.P. Morgan Securities LLC at the following address: 383
Madison Avenue, New York, New York, 10179, Attn: Investment Grade
Syndicate Desk, or by calling 1-212-834-4533; Merrill Lynch,
Pierce, Fenner & Smith Incorporated at the following address:
NC1-004-03-43, 200 North College Street, 3rd Floor, Charlotte,
North Carolina, 28255-0001, Attn: Prospectus Department, or by
calling 1-800-294-1322; or Wells Fargo Securities, LLC at the
following address: 608 2nd Avenue South, Suite 1000, Minneapolis,
Minnesota, 55402, or by calling 1-800-645-3751.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding the company’s 2017 financial
performance, growth strategy, capital allocation strategy, tax
planning strategies, the expected savings from the debt
refinancing, and the performance of the markets in which the
company operates. These forward-looking statements are based on the
company’s currently available information and its current
assumptions, expectations and projections about future
events. They are subject to future events, risks and
uncertainties—many of which are beyond the company’s control—as
well as potentially inaccurate assumptions, which could cause
actual results to differ materially from those in the
forward-looking statements. Further information on these
factors and other risks that may affect the company’s business is
included in filings it makes with the SEC from time to time,
including its Form 10-K for the year ended Dec. 31, 2016, Form
10-Qs for the quarters ended March 31, 2017, and June 30, 2017, and
in its other SEC filings. The Company assumes no obligations
to update these forward-looking statements.
About Allegion™
Allegion (NYSE: ALLE) is a global pioneer in safety and
security, with leading brands like CISA®, Interflex®, LCN®,
Schlage®, Simons-Voss® and Von Duprin®. Focusing on security
around the door and adjacent areas, Allegion produces a range of
solutions for homes, businesses, schools and other institutions.
Allegion is a $2.2 billion company, with products sold in
approximately 130 countries.
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version on businesswire.com: http://www.businesswire.com/news/home/20171003006509/en/
Allegion plcMedia:Maria Pia Tamburri,
+1-317-810-3399Director, Public
AffairsMaria.Tamburri@allegion.comorAnalysts:Mike Wagnes,
+1-317-810-3494Vice President, Treasury and Investor
RelationsMichael.Wagnes@allegion.com
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