8-KOther EventsExhibits & Filings

Howmet Aerospace Inc. 8-K Report, Corporate Update (Aug 18, 2021)

Filed August 18, 2021For Securities:HWM

Summary

Howmet Aerospace Inc. (HWM) announced significant capital allocation actions on August 18, 2021. The company's Board of Directors authorized an additional share repurchase program of up to $1.5 billion, adding to previously available authorization, bringing the total potential repurchase capacity to approximately $1.577 billion. This substantial buyback authorization signals management's confidence in the company's financial position and its commitment to returning value to shareholders. In conjunction with the share repurchases, Howmet Aerospace also announced a proposed offering of senior notes. The net proceeds from this offering are intended to fund a cash tender offer to repurchase up to $600 million of its outstanding 6.875% Notes due 2025. This debt management strategy aims to reduce annual interest expense and improve the company's debt maturity profile, thereby enhancing financial flexibility and potentially increasing profitability. The offering of new notes is independent of the tender offer's success.

Key Highlights

  • 1Howmet Aerospace authorized an additional $1.5 billion share repurchase program.
  • 2The total available share repurchase authorization now stands at approximately $1.577 billion.
  • 3The company plans to offer new senior notes to fund debt management activities.
  • 4A cash tender offer will be made to repurchase up to $600 million of its 6.875% Notes due 2025.
  • 5These actions are expected to reduce annual interest expense and optimize debt maturities.
  • 6The new note offering is not contingent on the completion of the tender offer.

Frequently Asked Questions

Following the August 2021 authorization, Howmet Aerospace has a total repurchase authorization of up to approximately $1.577 billion, combining the new $1.5 billion program with the previously remaining authorization of approximately $77 million.

The company intends to use the net proceeds from the proposed offering of senior notes to fund the cash tender offer for its 6.875% Notes due 2025, up to $600 million in principal amount. Cash on hand may also be used if necessary.

Howmet Aerospace anticipates that the proposed debt actions will result in a reduction of annual interest expense and a better spread of its debt maturities over the next several years, enhancing financial flexibility.

No, the offering of the new senior notes is not conditioned upon the consummation of the tender offer to repurchase the 2025 notes.