01—Abstract
Summary
Summary of the 8-K filed February 27, 2024. Cited figures are marked; the original filing is the authoritative source.
WESCO International, Inc. (NYSE: WCC) announced on February 26, 2024 that its wholly owned subsidiary, WESCO Distribution, Inc., commenced and priced a private offering of senior notes to eligible purchasers.
The offering was upsized from the previously announced $750 milliona per tranche: $900 million of 6.375% senior notes due 2029 (5-Year Notes) and $850 million of 6.625% senior notes due 2032 (8-Year Notes), both priced at 100.000% of principal. The filing states that net proceeds are expected to be approximately $1,728.4 million after the initial purchasers' discount and estimated offering expenses, with settlement scheduled for March 7, 2024. The company intends to use the proceeds to redeem all of its outstanding 7.125% senior notes due 2025 on or after June 15, 2024, and for general corporate purposes.
Before that redemption, the issuer plans to temporarily use proceeds to repay a portion of its accounts receivable securitization facility and all outstanding borrowings under its asset-based revolving credit facility, then redraw under those facilities in amounts sufficient to redeem the 2025 notes. The notes are unsecured, unsubordinated obligations of the issuer, guaranteed on an unsecured, unsubordinated basis by WESCO International and its wholly owned subsidiary, Anixter Inc. The notes are being offered only to qualified institutional buyers under Rule 144A and to non-U.S. persons under Regulation S, and have not been registered under the Securities Act.
For investors, the filing is primarily a debt refinancing and extension of maturities: it replaces the 2025 notes with longer-dated notes and reflects a larger aggregate issuance than originally marketed. The filing does not discuss the company's operating results.
02—Key points
Key Highlights
- Upsized offering: 5-Year Notes increased from $750 million to $900 million (6.375% due 2029); 8-Year Notes increased from $750 million to $850 million (6.625% due 2032).
- Both tranches priced at 100.000% of aggregate principal amount; settlement scheduled for March 7, 2024, subject to customary closing conditions.
- Estimated net proceeds of approximately $1,728.4 million after initial purchasers' discount and estimated offering expenses.
- Planned use of proceeds: redeem all outstanding 7.125% senior notes due 2025 on or after June 15, 2024, and for general corporate purposes.
- Interim financing steps: proceeds temporarily repay part of the receivables securitization facility and all ABL revolver borrowings, then redraw to fund the 2025 notes redemption.
- Notes are unsecured and unsubordinated, guaranteed by WESCO International and Anixter Inc.
- Offered under Rule 144A and Regulation S only; not registered under the Securities Act, and the filing is not a notice of redemption.
03—Questions
Frequently Asked Questions
What securities were offered and on what terms?
WESCO Distribution, Inc. priced $900 million of 6.375% senior notes due 2029 and $850 million of 6.625% senior notes due 2032, each at 100.000% of principal amount. The offering was a private placement to qualified institutional buyers and certain non-U.S. persons.
Why was the offering size increased?
The filing states that the aggregate principal amount of each tranche was increased from the previously announced $750 million. It does not give a reason for the increase.
What will the proceeds be used for?
The company intends to use the net proceeds, estimated at approximately $1,728.4 million, to redeem all outstanding 7.125% senior notes due 2025 on or after June 15, 2024, and for general corporate purposes. Before that redemption, proceeds will temporarily repay receivables facility and ABL borrowings, which will be redrawn to fund the redemption.
Who stands behind the notes?
The notes are unsecured, unsubordinated obligations of WESCO Distribution, Inc. and are guaranteed on an unsecured, unsubordinated basis by WESCO International, Inc. and its wholly owned subsidiary, Anixter Inc.
Can the notes be bought by the general public?
No. The notes are offered only to qualified institutional buyers under Rule 144A and to non-U.S. persons outside the United States under Regulation S. They have not been registered under the Securities Act, and any offer is made only through a private offering memorandum.
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