Live Nation Entertainment, Inc. has announced its plans to offer $1.3 billion in aggregate principal amount of convertible senior notes due 2031. The company aims to use the net proceeds from this offering, along with borrowings under a new senior secured credit facility, for various purposes.
The company intends to use the funds to fully redeem its 5.625% senior notes due 2026, repay amounts outstanding under its term loan b facility and revolving credit facility, pay related fees and expenses, and for general corporate purposes. Additionally, it plans to grant the initial purchasers the right to purchase up to an additional $100.0 million aggregate principal amount of convertible notes.
The convertible notes will accrue interest payable semi-annually and will mature on October 15, 2031. They may be converted under certain conditions and during specific periods, with the company having the option to settle conversions with shares of its common stock, cash, or a combination of both.
Furthermore, holders of the convertible notes will have the right to require the company to repurchase all or a portion of their convertible notes at 100% of their principal amount, plus any accrued and unpaid interest, upon the occurrence of certain defined corporate events. The company may not redeem the convertible notes prior to October 20, 2028.
Following the offering, Live Nation Entertainment, Inc. intends to amend, amend and restate, or refinance its existing senior secured credit facility, expecting to obtain various types of facilities. The closing of these transactions is not a condition to the offering of the convertible notes.
It's important to note that the convertible notes will be offered through a private placement and will not be registered under the securities act of 1933, as amended, or any state securities laws. As a result, the convertible notes and any common stock issuable upon conversion may not be offered or sold in the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements.
The company has not yet disclosed how these new financial moves will impact its financial statements or ratios, but these actions will play a significant role in shaping its financial structure and obligations over the coming years. The market has reacted to these announcements by moving the company's shares 0.14% to a price of $152.96. For the full picture, make sure to review Live Nation Entertainment's 8-K report.
