Hexcel Corporation has announced the pricing of $300 million of unsecured 5.875% senior notes due 2035. The net proceeds from this offering are estimated to be approximately $298 million. The company plans to use the net proceeds to fund the redemption of its unsecured 4.700% senior notes due 2025, of which $300 million was outstanding as of the announcement date.
The offering is expected to close on February 26, 2025, subject to customary closing conditions. BofA Securities, Inc., Goldman Sachs & Co. LLC, and J.P. Morgan Securities LLC are acting as joint book-running managers for the offering.
This marks a significant increase in the interest rate from the previous notes due 2025, which carried a 4.700% interest rate. The increase in the interest rate from 4.700% to 5.875% on the new notes due 2035 represents a 1.175% increase.
Investors in the company's previous notes due 2025 will likely see a decline in their annual interest income as a result of the increased interest rate on the new notes due 2035. Additionally, the redemption of the previous notes due 2025 will impact the company's future interest expenses. The market has reacted to these announcements by moving the company's shares -2.0% to a price of $64.84. Check out the company's full 8-K submission here.
