01—Abstract
Summary
Summary of the 8-K filed February 14, 2024. Cited figures are marked; the original filing is the authoritative source.
On February 14, 2024, The Estée Lauder Companies Inc. completed a public offering of $650,000,000a aggregate principal amount of 5.000% Senior Notes due 2034 under its automatic shelf registration statement on Form S-3.
The notes are senior unsecured obligations that rank equally with the company's other senior unsecured indebtedness. Interest is payable semi-annually on February 14 and August 14, beginning August 14, 2024. The notes are redeemable at the company's option, with a make-whole premium before November 14, 2033, and at 100%b of principal plus accrued interest on or after that date.
Upon a Change of Control Repurchase Event, the company must offer to repurchase the notes at 101%c of principal. The company sold the notes to the underwriters at 99.239% of principal, and the underwriters offered them to the public at 99.689%. The underwriters were BofA Securities, Goldman Sachs & Co. LLC and MUFG Securities Americas Inc., as representatives.
The notes were issued under a 1999 indenture with U.S. Bank Trust National Association as trustee, and the filing includes customary covenants limiting mergers and asset sales, secured indebtedness and sale-leaseback transactions. In the accompanying press release, the company stated that it intends to use the net proceeds for general corporate purposes, which may include funding a portion of the purchase price to acquire the remaining interest in DECIEM, operating expenses, working capital, capital expenditures, and redemption or repayment of short-term or long-term borrowings, including commercial paper as it matures.
02—Key points
Key Highlights
- Issued $650.0 million of 5.000% Senior Notes due February 14, 2034, completed February 14, 2024.
- Notes were sold to underwriters at 99.239% of principal and offered to the public at 99.689%.
- Notes are senior unsecured and rank equally with the company's other senior unsecured indebtedness.
- Make-whole redemption is available before November 14, 2033; redemption at 100% of principal plus accrued interest applies on or after that date.
- A Change of Control Repurchase Event requires an offer to repurchase the notes at 101% of principal.
- Net proceeds are for general corporate purposes, which may include funding a portion of the purchase price for the remaining interest in DECIEM.
- Offering was made under an automatic shelf registration statement on Form S-3 filed May 20, 2021.
03—Questions
Frequently Asked Questions
How much debt did Estée Lauder issue and on what terms?
The company issued $650.0 million aggregate principal amount of 5.000% Senior Notes due February 14, 2034. Interest is paid semi-annually on February 14 and August 14, starting August 14, 2024.
What price did the underwriters pay and charge investors?
The company sold the notes to the underwriters at 99.239% of principal. The underwriters offered them to the public at 99.689% of principal.
Can the company redeem the notes early?
Yes. Before November 14, 2033, the company may redeem the notes at any time by paying a make-whole premium plus accrued and unpaid interest. On or after November 14, 2033, it may redeem them at 100% of principal plus accrued and unpaid interest.
What protections do noteholders have?
The notes include customary covenants limiting the company's ability to merge, consolidate or sell assets, secure indebtedness with liens, and enter sale-leaseback transactions. If a Change of Control Repurchase Event occurs, the company must offer to repurchase the notes at 101% of principal.
What will the company use the proceeds for?
According to the press release, the net proceeds are for general corporate purposes. These may include funding a portion of the purchase price to acquire the remaining interest in DECIEM, operating expenses, working capital, capital expenditures, and repaying short-term or long-term borrowings, including commercial paper as it matures.
04—Continue