How much debt is Otis raising in these offerings?

Otis priced a $600,000,000 dollar-denominated notes offering due 2031 and Highland Holdings S.à r.l., its indirect wholly-owned subsidiary, priced a €850 million euro-denominated notes offering due 2027, which Otis fully and unconditionally guarantees.

What will the proceeds be used for?

Otis intends to use the net proceeds from both offerings, together with cash on hand, to repay at maturity its 2.056% notes due April 5, 2025, of which $1.3 billion principal is outstanding. Any remaining euro offering proceeds may be used to repay certain commercial paper borrowings and for general corporate purposes.

What is the ranking of the new notes relative to other debt?

The Otis Notes and the Highland Notes, with Otis's parent guarantee, are unsecured, unsubordinated obligations. They rank equally in right of payment with all existing and future unsecured, unsubordinated indebtedness of Otis and Highland, respectively.

When are the offerings expected to close?

Both the Dollar Offering and the Euro Offering are expected to close on November 19, 2024.

Under what registration are the notes being sold?

The notes are being issued pursuant to the Registration Statement on Form S-3ASR (File No. 333-270834) filed March 24, 2023, with the base prospectus dated March 24, 2023 and related prospectus supplements.

OTIS 8-K: Financial Events

01—Abstract

Summary

Summary of the 8-K filed November 14, 2024. Cited figures are marked; the original filing is the authoritative source.

Otis Worldwide Corporation filed this Form 8-K on November 14, 2024 to disclose two debt offerings it priced that week.

On November 12, 2024, Otis priced a $600,000,000^a aggregate principal amount of 5.125% Notes due 2031 (the "Dollar Offering"), with expected net proceeds of approximately $594.5 million after underwriting discount and offering expenses. The notes are unsecured, unsubordinated obligations that rank equally with Otis's existing and future unsecured, unsubordinated indebtedness, and the closing is expected on November 19, 2024. On November 13, 2024, Highland Holdings S.à r.l., an indirect wholly-owned consolidated subsidiary of Otis, priced a euro offering of €850 million aggregate principal amount of 2.875% Notes due 2027 (the "Euro Offering"), fully and unconditionally guaranteed by Otis.

Estimated net proceeds to Highland are approximately €842 million, or approximately $902 million^b based on the euro/U.S. dollar exchange rate as of November 8, 2024, with closing also expected on November 19, 2024. Otis intends to use the combined proceeds, together with cash on hand, to repay at maturity its 2.056% notes due April 5, 2025, of which $1.3 billion principal amount is currently outstanding.

Any remaining Euro Offering proceeds may go to repay certain commercial paper borrowings and for general corporate purposes. The filing shows Otis refinancing near-term maturities with longer-dated debt.

02—Key points

Key Highlights

Dollar Offering: $600 million of 5.125% Notes due November 19, 2031, priced November 12, 2024, with estimated net proceeds of about $594.5 million.
Euro Offering: €850 million of 2.875% Notes due November 19, 2027, issued by Highland Holdings S.à r.l. and guaranteed by Otis, priced November 13, 2024.
Euro Offering net proceeds to Highland estimated at approximately €842 million, or about $902 million at the November 8, 2024 exchange rate.
Use of proceeds: repayment at maturity of the 2.056% notes due April 5, 2025, of which $1.3 billion principal is outstanding, combined with cash on hand.
Both offerings are unsecured, unsubordinated obligations ranking equally with existing and future unsecured, unsubordinated indebtedness, and are issued under the Registration Statement on Form S-3ASR (File No. 333-270834).
Both issuances are expected to close on November 19, 2024, under base indentures with The Bank of New York Mellon Trust Company, N.A., as trustee.
Item 2.03 is disclosed, incorporating the debt terms by reference from Item 8.01; underwriting agreements are filed as Exhibits 1.1 and 1.2.

03—Questions

Frequently Asked Questions

How much debt is Otis raising in these offerings?
Otis priced a $600,000,000 dollar-denominated notes offering due 2031 and Highland Holdings S.à r.l., its indirect wholly-owned subsidiary, priced a €850 million euro-denominated notes offering due 2027, which Otis fully and unconditionally guarantees.
What will the proceeds be used for?
Otis intends to use the net proceeds from both offerings, together with cash on hand, to repay at maturity its 2.056% notes due April 5, 2025, of which $1.3 billion principal is outstanding. Any remaining euro offering proceeds may be used to repay certain commercial paper borrowings and for general corporate purposes.
What is the ranking of the new notes relative to other debt?
The Otis Notes and the Highland Notes, with Otis's parent guarantee, are unsecured, unsubordinated obligations. They rank equally in right of payment with all existing and future unsecured, unsubordinated indebtedness of Otis and Highland, respectively.
When are the offerings expected to close?
Both the Dollar Offering and the Euro Offering are expected to close on November 19, 2024.
Under what registration are the notes being sold?
The notes are being issued pursuant to the Registration Statement on Form S-3ASR (File No. 333-270834) filed March 24, 2023, with the base prospectus dated March 24, 2023 and related prospectus supplements.

04—Continue

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