LDOS
Leidos Holdings, INC
NYSE
8-K: Leidos Completes Tender Offer for 3.625% Senior Notes Due 2025, Announces Satisfaction and Discharge
Sentiment:
Debt Management Announcement
25 February 2025 4:23 PM
Leidos successfully completed a tender offer for its 3.625% senior notes due 2025 and subsequently satisfied and discharged the related indenture.
Capital raise
Leidos issued $500 million aggregate principal amount of 5.400% senior notes due 2032.
Leidos issued $500 million aggregate principal amount of 5.500% senior notes due 2035.
The proceeds from these issuances were used to fund the repurchase and discharge of the 2025 Notes.
Summary
- Leidos, through its subsidiary Leidos, Inc., executed a tender offer to repurchase its outstanding 3.625% senior notes due in 2025.
- The tender offer expired on February 20, 2025, with $267,393,000 (53.48%) of the $500 million aggregate principal amount of the 2025 Notes validly tendered and not withdrawn.
- Leidos paid $998.30 for each $1,000 principal amount of notes tendered, plus accrued and unpaid interest from November 15, 2024.
- On February 25, 2025, Leidos deposited funds with Citibank, N.A., as trustee, sufficient to cover the principal and interest on the 2025 Notes, leading to the satisfaction and discharge of the indenture.
- The discharge was funded using proceeds from the issuance and sale of $500 million of 5.400% senior notes due 2032 and $500 million of 5.500% senior notes due 2035.
- Following the discharge, Leidos is released from its obligations under the indenture, except for provisions that survive the discharge.
Sentiment
Score: 7
Explanation: The sentiment is moderately positive as Leidos successfully managed its debt and secured new financing. The document focuses on completed actions and provides standard forward-looking disclaimers.
Positives
- Leidos successfully managed its debt by repurchasing and discharging the 2025 Notes.
- The company secured new financing at rates of 5.400% and 5.500% for notes due in 2032 and 2035, respectively.
- The tender offer reduced the outstanding principal amount of the 2025 Notes.
- The company has been released from most obligations under the May 2020 Indenture with respect to the 2025 Notes.
Risks
- The document includes a standard list of forward-looking statement disclaimers, highlighting various risks and uncertainties that could affect Leidos' future performance.
- These risks include developments in government budgets, economic conditions, geopolitical events, and cybersecurity threats.
Future Outlook
Leidos expects (but is not obligated) to repay any 2025 Notes remaining outstanding after the consummation of the Tender Offer in accordance with the satisfaction and discharge terms and conditions set forth in the related indenture.
Industry Context
This announcement reflects a common practice among companies to manage their debt obligations by refinancing existing debt at potentially more favorable terms or extending the maturity profile. Leidos' actions are consistent with strategies employed by other large companies to optimize their capital structure.
Comparison to Industry Standards
- Similar companies such as Booz Allen Hamilton and CACI International also actively manage their debt through tender offers and refinancing.
- The interest rates on the new senior notes (5.400% and 5.500%) are within the typical range for corporate debt issuances of similar credit quality in the current market environment.
- The tender offer participation rate of 53.48% is a reasonable outcome, as some holders may prefer to hold the notes until maturity.
Stakeholder Impact
- Shareholders may view the debt management favorably as it optimizes the company's capital structure.
- Bondholders who tendered their notes received cash consideration plus accrued interest.
- The issuance of new notes impacts future interest expenses and cash flows.
Key Dates
- 2020-05-12: Date of the May 2020 Indenture.
- 2024-11-15: Last interest payment date for the 2025 Notes.
- 2025-02-13: Date of the Offer to Purchase.
- 2025-02-20: Pricing of the Tender Offer and expiration date.
- 2025-02-21: Announcement of the results of the Tender Offer.
- 2025-02-25: Settlement Date for the Tender Offer and date of satisfaction and discharge of the 2025 Notes.
- 2025-05-15: Maturity date of the 2025 Notes.
Keywords
LDOS
Leidos Holdings, INC
NYSE
Sector: TBD
Filings with Classifications
Better than expected
6 May 2025 11:55 AM
Quarterly Report
- Revenue increased by 6.8% year-over-year.
- Operating income increased by 27.7% year-over-year.
- Diluted EPS increased from $2.07 to $2.77.
Better than expected
5 May 2025 10:44 PM
Earnings Release
- The company's revenue, net income, and adjusted EBITDA all exceeded expectations, demonstrating strong growth and profitability.
- The company's non-GAAP diluted EPS grew by 30% to $2.97, exceeding expectations.
- The company reaffirmed its full-year revenue guidance of $16.90 $17.30 billion, exceeding expectations.
Better than expected
17 March 2025 5:01 PM
Proxy Statement
- The company achieved record revenues and exceeded its three-year financial goals.
- Adjusted EBITDA margin increased significantly.
- The company's backlog grew substantially.
Capital raise
25 February 2025 4:23 PM
Debt Management Announcement
- Leidos issued $500 million aggregate principal amount of 5.400% senior notes due 2032.
- Leidos issued $500 million aggregate principal amount of 5.500% senior notes due 2035.
- The proceeds from these issuances were used to fund the repurchase and discharge of the 2025 Notes.
Capital raise
20 February 2025 4:15 PM
Debt Issuance
- Leidos, Inc. issued $500 million aggregate principal amount of 5.400% senior notes due 2032 and $500 million aggregate principal amount of 5.500% senior notes due 2035.
- The Notes Offering was made pursuant to the Issuers automatic shelf registration statement on Form S-3 (File No. 333-269820).
- The Issuer intends to use the net proceeds from the Notes Offering for general corporate purposes, including to: (i) repurchase for cash (the Tender Offer ) any and all of its outstanding 3.625% notes due 2025 (the 2025 Notes ) tendered in the Tender Offer; (ii) repay any 2025 Notes, in accordance with the satisfaction and discharge terms of an indenture, dated as of May 12, 2020, among the Issuer, Leidos, as guarantor, and the Trustee (the May 2020 Indenture ), that remain outstanding following the Tender Offer; (iii) repay a portion of the outstanding balance on its senior unsecured term loan facility; (iv) repurchase outstanding shares of its common stock; (v) fund potential acquisitions; and (vi) pay related fees and expenses.
Capital raise
13 February 2025 8:50 AM
Tender Offer Announcement
- Leidos intends to fund the tender offer and the repayment of any remaining notes through an offering of new senior notes.
- The completion of the tender offer is contingent upon the successful completion of this new offering.
Delay expected
11 February 2025 1:19 PM
Annual Results
- The Commercial & International segment experienced write-downs on certain programs within our UK operations for which cost and schedule were rebaselined.
Better than expected
11 February 2025 1:19 PM
Annual Results
- The company's operating income significantly increased due to lower impairment charges and a net increase in volumes on certain programs.
- Net income attributable to Leidos common stockholders was substantially higher compared to the previous fiscal year.
Better than expected
10 February 2025 8:29 PM
Earnings Release
- The company's revenue, EPS, and backlog all exceeded expectations, indicating strong performance across key financial metrics.
Better than expected
29 October 2024 10:42 AM
Quarterly Report
- The company's net income and revenue significantly improved compared to the same period last year, indicating better than expected results.
- The Health & Civil segment's performance was particularly strong, exceeding expectations.
Delay expected
29 October 2024 10:42 AM
Quarterly Report
- The document mentions delays in airline travel infrastructure projects impacting the Security Enterprise Solutions (SES) reporting unit.
Better than expected
28 October 2024 7:23 PM
Quarterly Report
- The company's net income and adjusted EBITDA significantly exceeded expectations, driven by improved operating performance and increased demand.
- The company raised its full-year guidance for revenue, adjusted EBITDA margin, and non-GAAP diluted EPS, indicating a positive outlook.
- The company's non-GAAP diluted EPS of $2.93 was a 44% increase year-over-year, significantly exceeding expectations.
Delay expected
30 July 2024 11:45 AM
Quarterly Report
- The company experienced write-downs on programs within its UK operations due to cost increases and schedule delays.
Better than expected
30 July 2024 11:45 AM
Quarterly Report
- The company's revenue, operating income, and net income all significantly exceeded the prior year's results, indicating better than expected performance.
- The Health & Civil segment's exceptional growth and profitability drove the overall positive results, surpassing expectations.
- The company's diluted EPS of $2.37 for the quarter and $4.42 for the six months were substantially higher than the prior year, indicating better than expected profitability.
Better than expected
29 July 2024 5:55 PM
Quarterly Report
- The company's revenue, net income, adjusted EBITDA, and non-GAAP diluted EPS all exceeded prior year results and expectations.
- The company increased its full-year guidance for adjusted EBITDA margin and non-GAAP diluted EPS.
Better than expected
30 April 2024 11:02 AM
Quarterly Report
- The company's net income, revenue, and operating income all significantly exceeded the prior year's results.
- The Health & Civil segment's performance was particularly strong, driving overall growth.
- The company's earnings per share also showed a substantial increase.
Better than expected
30 April 2024 6:05 AM
Quarterly Report
- Leidos exceeded expectations with a 7% increase in revenue, a 73% increase in net income, and a 42% increase in adjusted EBITDA.
- The company raised its full-year guidance for revenue, adjusted EBITDA margin, non-GAAP diluted EPS, and operating cash flow, indicating better-than-expected performance and outlook.
Better than expected
13 February 2024 6:08 AM
Quarterly Report
- Leidos exceeded its own financial guidance for the fourth quarter and fiscal year 2023, indicating better than expected results.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.