Fortune Brands Registers Public Offering of $600 Million

June 8th, 2023 by Editor

Fortune Brands Innovations Inc. announced a registered public offering this week of $600 million in aggregate principal amount of 5.875% senior unsecured notes set to mature in 2033. According to officials, the weighted-average interest rate will be approximately 4.5%, net of interest rate hedges established in late 2021 in anticipation of the offering.

In August 2022, the company executed an extension of its existing five-year revolving credit agreement, extending a $1.25 billion Senior Unsecured Revolving Credit Facility for a five-year term, dated for maturity in 2027. In December, it completed a spin-off of its cabinets business, MasterBrand Inc., creating two independent, publicly-traded companies.

Officials say the company received an upgraded credit rating from Moody’s to Baa2 Stable, rising one level from Baa3 Positive. Obligations rated Baa2 are subject to “moderate credit risk” and are considered medium grade.

“Fortune Brands Innovations’ solid business model and track record of sales growth and margin expansion have resulted in BBB-equivalent credit ratings from all three rating agencies,” said David Barry, the company’s chief financial officer. “The successful completion of this offering will enable us to continue executing on our strategy of delivering industry-leading brands, innovation, and channel management to our consumers and customers while maintaining an advantaged capital structure.” 

Officials said the company intends to use the net proceeds from notes to pay off 4% senior unsecured notes set to mature in September 2023, as well as to pay down any short-term borrowings and for general corporate purposes. The offering is expected to close on June 14, 2023, subject to customary closing conditions.

The senior unsecured notes offering is being made pursuant to an effective shelf registration statement that the company has on file with the Securities and Exchange Commission (SEC), including a base prospectus. Such an offering may only be made by means of a prospectus supplement and base prospectus. When made available, electronic copies of the preliminary prospectus supplement, the accompanying prospectus and the final prospectus supplement can be obtained for free via EDGAR, which can be accessed at www.sec.gov.

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