L Brands to issue secured and unsecured notes to raise $750 million.
Category: L Brands (LB)
Date: 22 June 2020 Stock price of L Brands: $14.48 We take a look at a press release from L Brands in which the group announced that they raised $750 million via secured and unsecured notes and they aim to use the money to reduce debt by paying of 2021 notes and to fund retirement plan obligations around $200 million
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The company operates 2,897 company-owned specialty stores in the United States, Canada, the United Kingdom and Greater China"
More about L Brands
L Brands, through Bath & Body Works, Victoria’s Secret and PINK, is an international company. The company operates 2,897 company-owned specialty stores in the United States, Canada, the United Kingdom and Greater China, and its brands are also sold in more than 700 franchised locations worldwide.
L Brands offered secured and unsecured notes to raise $750 million
COLUMBUS, Ohio, June 18, 2020 (GLOBE NEWSWIRE) -- L Brands, Inc. (NYSE: LB) announced today the closing of its previously announced offering to sell $750 million aggregate principal amount of 6.875% senior secured notes due 2025 (the “Secured Notes”) and $500 million aggregate principal amount of 9.375% senior notes due 2025 (the “Unsecured Notes” and, together with the Secured Notes, the “Notes”) in a private placement offering to eligible purchasers.
The Notes are not being registered under the Securities Act of 1933 (the “Securities Act”) or the securities laws of any state and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the Securities Act and applicable state securities laws. The Notes may be resold by the initial purchasers pursuant to Rule 144A and Regulation S under the Securities Act.
The company intends to use the net proceeds from the offering, after deducting discounts and commission to the initial purchasers and estimated offering expenses, (i) to repurchase or redeem all of our outstanding 2021 Notes and to pay any related premiums and expenses in connection therewith, (ii) to fund approximately $200 million of retirement plan obligations and (iii) for general corporate purposes, including to refinance other indebtedness with a near-term maturity date.
This press release is not an offer to purchase or a notice of redemption with regard to any securities.
The Notes are not being registered under the Securities Act of 1933 (the “Securities Act”) or the securities laws of any state and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the Securities Act and applicable state securities laws. The Notes may be resold by the initial purchasers pursuant to Rule 144A and Regulation S under the Securities Act.
The company intends to use the net proceeds from the offering, after deducting discounts and commission to the initial purchasers and estimated offering expenses, (i) to repurchase or redeem all of our outstanding 2021 Notes and to pay any related premiums and expenses in connection therewith, (ii) to fund approximately $200 million of retirement plan obligations and (iii) for general corporate purposes, including to refinance other indebtedness with a near-term maturity date.
This press release is not an offer to purchase or a notice of redemption with regard to any securities.
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L Brands (LB) stock price history
The image below shows the stock price history of L Brands (LB) over the last 3 years. And it's not been a good time for L Brands (LB) stockholders over the last 3 years. Over the last 3 years the stock of L Brands (LB) declined by -82.3%. Its been an almost continuous decline in the stock price of L Brands since the start of 2018.
Our latest stock valuation of L Brands (24 May 2020)
So what is L brands stock worth based on their latest earnings report? Based on L brands latest earnings report and the fact that they are losing making right now it has to value their stock, especially since we cannot use their stockholders equity per share as a valuation as they have a stockholders deficit as their assets is far less than their liabilities at this point. So for this valuation we will use gross profit for the base of our valuation. Our valuation model provides a target price of $16.60. We therefore believe that the stock of L Brands is undervalued at its current price.
We usually recommend that long term and fundamental investors look to enter a stock at least 10% below our target price (full value price) which in this case is $16.60 . A good entry point into L Brands would therefore be at $14.90 or below
With the news of the group looking to split their operations into two separately listed entities should be good news for investors and provide impetus for the stock price going forward.
We usually recommend that long term and fundamental investors look to enter a stock at least 10% below our target price (full value price) which in this case is $16.60 . A good entry point into L Brands would therefore be at $14.90 or below
With the news of the group looking to split their operations into two separately listed entities should be good news for investors and provide impetus for the stock price going forward.