Unisys Completes $700 Million Private Offering of Senior Secured Notes for Financial Strategy

Unisys Completes $700 Million Private Offering of Senior Secured Notes



Unisys Corporation (NYSE: UIS) recently announced the successful closing of its previously revealed offering of $700 million in senior secured notes. This financial move, which aims to strengthen the company’s balance sheet, comes as part of Unisys’ broader strategy to refinance existing debt and address its U.S. pension obligations.

The notes, bearing an interest rate of 10.625% and set to mature in 2031, were offered privately to qualified institutional buyers and in accordance with regulations that govern securities offerings. The proceeds from this offering will be utilized in a three-pronged strategy: refinancing Unisys' existing 6.875% senior secured notes maturing in 2027, partially funding a long-term pension deficit, and covering general corporate expenses.

Significance of the Offering



Michael Thomson, the CEO and president of Unisys, hailed the completion of this private offering as a significant milestone. It allows the company to simplify its capital structure, manage its pension liabilities more effectively, and overall enhance financial stability. “This proactive approach sets the stage for Unisys to pursue its long-term objectives,” he remarked.

By employing the net proceeds, alongside available cash, Unisys plans to buy back any outstanding existing notes, provide related premium payments, and amend terms for better future financial management. Such efforts demonstrate Unisys' commitment to maintaining financial health and optimizing operational efficiencies.

Asset Backing and Guarantees



The newly issued senior secured notes are guaranteed by Unisys' material domestic subsidiaries, which enhances the creditworthiness of these securities. The notes are secured by liens on nearly all the assets of Unisys and its subsidiary guarantors. This structure reassures investors regarding the safety of their investment while also facilitating Unisys' financial maneuverability.

In tandem with this offering, Unisys amended its existing asset-based lending (ABL) credit facility, maintaining a revolving commitment of $125 million with a potential increase to $155 million. The maturity date for this facility has also been extended to June 2030, reflecting a strategic alignment with the company's long-term plans.

Future Outlook



This financial maneuvering positions Unisys more favorably within the technology sector, especially as it aims to continue delivering innovative solutions to its global client base. With operations spanning over 150 years, the company is well equipped to leverage historical insights while embracing digital transformation trends, such as cloud computing and AI.

In summary, the successful closure of this $700 million private offering illustrates Unisys’ ongoing commitment to financial prudence and robust management of its capital structure. By addressing both short-term financial obligations and long-term strategic initiatives, Unisys has poised itself for further growth and sustainable success in the rapidly evolving technology landscape.

Conclusion



To truly understand how Unisys navigates through financial complexities and operational challenges, one must look at their comprehensive approach to investment and resource allocation. The recent offerings act not just as immediate financial solutions, but as integral steps towards a more stable and resilient corporate future. By maintaining transparency and engaging stakeholders effectively, Unisys is set to remain a leader in delivering cutting-edge technology solutions across industries.

Topics Business Technology)

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