LDOS
Leidos Holdings, INC
NYSE
8-K: Leidos Launches Tender Offer for $500 Million in Senior Notes Due 2025
Sentiment:
Tender Offer Announcement
13 February 2025 8:50 AM
Leidos, Inc., a wholly-owned subsidiary of Leidos Holdings, Inc., has commenced a cash tender offer to purchase any and all of its outstanding 3.625% Senior Notes due 2025.
Capital raise
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.
Summary
- Leidos, Inc. has initiated a cash tender offer for its outstanding 3.625% Senior Notes due in 2025.
- The total principal amount of these notes outstanding is $500 million.
- The tender offer is subject to the terms and conditions outlined in the Offer to Purchase, dated February 13, 2025.
- The offer will expire at 5:00 p.m. Eastern Time on February 20, 2025, unless extended.
- Holders who validly tender their notes will receive a consideration determined by a fixed spread plus the yield based on the bid-side price of a U.S. Treasury Reference Security.
- Accrued and unpaid interest from November 15, 2024, will also be paid to holders whose notes are accepted.
- The settlement date is expected to be February 25, 2025.
- The tender offer is contingent upon Leidos successfully completing an offering of new senior notes to generate sufficient funds for the repurchase and repayment of the 2025 Notes.
- Citigroup, J.P. Morgan, and U.S. Bancorp are acting as Dealer Managers for the tender offer.
- Global Bondholder Services Corporation is the depositary agent and information agent.
Sentiment
Score: 7
Explanation: The announcement is a routine financial transaction, indicating proactive debt management. The sentiment is neutral to slightly positive as it reflects a standard corporate finance activity.
Positives
- Leidos is proactively managing its debt by offering to repurchase its senior notes.
- The tender offer provides noteholders with an opportunity to receive cash for their holdings.
- The company intends to satisfy and discharge any remaining 2025 Notes after the tender offer, if any remain.
Risks
- The tender offer is contingent upon the successful completion of a new senior notes offering.
- If the new offering is not completed on satisfactory terms, the tender offer may not be consummated.
- Holders are making their own decision as to whether to tender any of their 2025 Notes and, if so, the principal amount of 2025 Notes to tender.
Future Outlook
Leidos expects (but is not obligated) to satisfy and discharge any 2025 Notes remaining outstanding after the tender offer, in accordance with the terms of the related indenture.
Industry Context
Tender offers are a common method for companies to manage their debt obligations, especially in response to changing interest rate environments or to optimize their capital structure.
Comparison to Industry Standards
- Comparable companies such as General Dynamics, Lockheed Martin, and Northrop Grumman also actively manage their debt through various means, including tender offers and refinancing.
- The terms of the tender offer, including the fixed spread and reference to the U.S. Treasury yield, are standard practices in the fixed income market.
- The success of the tender offer will depend on market conditions and the attractiveness of the offer to noteholders, similar to other debt management activities in the industry.
Stakeholder Impact
- Shareholders may see a positive impact if the debt management reduces the company's overall interest expense.
- Noteholders have the opportunity to receive cash for their holdings.
- The successful completion of the tender offer could improve the company's financial flexibility.
Next Steps
- Holders of the 2025 Notes must decide whether to tender their notes before the expiration time on February 20, 2025.
- Leidos will proceed with the offering of new senior notes to fund the tender offer.
- The company will announce the results of the tender offer following the expiration date.
Key Dates
- 2024-11-15: Interest payment date prior to the tender offer.
- 2025-02-13: Date of the press release and commencement of the tender offer.
- 2025-02-20: Expiration Time of the Tender Offer at 5:00 p.m. ET, unless extended.
- 2025-02-25: Expected Settlement Date for the Tender Offer.
Keywords
Tender Offer, Senior Notes, Leidos, Debt Repurchase, Fixed Income, Bonds
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.
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.
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
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.
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