Summary
Ross Stores, Inc. (ROST) filed an 8-K on October 22, 2020, reporting on two significant financial events that occurred around October 21-22, 2020. The company successfully issued $1 billion in aggregate principal amount of unsecured senior notes, split equally between 0.875% Senior Notes due 2026 and 1.875% Senior Notes due 2031. These notes were issued under an existing shelf registration statement and were offered to the public with a slight discount to their principal amount. The net proceeds from this debt issuance, approximately $987.2 million after expenses, were strategically used to fund the early settlement of the company's concurrent tender offers for several series of its existing senior notes. The tender offer successfully repurchased a significant portion of higher-coupon debt, including the 5.450% Senior Notes due 2050, 4.800% Senior Notes due 2030, and 4.700% Senior Notes due 2027, up to an aggregate tender cap of $1 billion. The company did not accept any tenders for the 2025 or 2024 notes as the cap was reached with the earlier series.
Key Highlights
- 1Ross Stores issued $1 billion in new senior notes: $500 million of 0.875% Senior Notes due 2026 and $500 million of 1.875% Senior Notes due 2031.
- 2The new notes were issued at a slight discount to their principal amount, yielding net proceeds of approximately $987.2 million.
- 3The company completed the early settlement of tender offers to repurchase existing senior notes.
- 4The proceeds from the new debt issuance were used to fund the repurchase of approximately $999.9 million (excluding interest) of existing senior notes.
- 5Higher-coupon debt, specifically the 5.450% (2050), 4.800% (2030), and 4.700% (2027) notes, were primarily repurchased.
- 6The aggregate principal amount of tendered notes accepted for purchase reached the $1 billion cap, with no purchase of the 2025 or 2024 notes.
- 7This transaction effectively refinanced a portion of Ross Stores' debt, replacing higher-interest debt with lower-interest notes.