Dupont de Nemours, Inc. and Qnity Electronics, Inc. have announced the intention to offer $1.5 billion aggregate principal amount of senior secured notes due 2032 and $1.0 billion aggregate principal amount of senior notes due 2033. These notes are being offered in connection with Dupont's plan to separate its electronics business through a pro rata distribution of Qnity common stock to stockholders of Dupont.
Upon the consummation of the spin-off, the unsecured notes will be jointly and severally and unconditionally guaranteed on a senior unsecured basis, while the secured notes will be jointly and severally and unconditionally guaranteed on a senior secured basis by each Qnity subsidiary that is a borrower or guarantees indebtedness under Qnity’s planned senior secured credit facilities.
The gross proceeds of the offering will be held in escrow and released in connection with the completion of the spin-off. Qnity intends to use the net proceeds from the offering, together with borrowings under its new senior secured credit facilities and cash on hand, to finance the payment of a cash distribution to Dupont plus the pre-funded interest deposit in connection with the issuance of notes.
If the spin-off is not consummated within the specified timeline, each series of notes will be subject to a special mandatory redemption.
The offering is targeted for completion on November 1, 2025, subject to the completion of the spin-off. The companies have stated that the spin-off will not require a shareholder vote and is subject to satisfaction of customary conditions, including final approval by Dupont’s board of directors, receipt of tax opinion from counsel, the completion and effectiveness of the form 10 registration statement filed with the SEC, applicable regulatory approvals, and satisfactory completion of financing.
It is worth noting that each series of notes and the related guarantees will be offered in the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and outside the United States pursuant to Regulation S under the Securities Act. Today the company's shares have moved -0.27% to a price of $70.28. If you want to know more, read the company's complete 8-K report here.
