PARIS - Constellium SE (NYSE: NYSE:CSTM), a global leader in the development of innovative aluminum products, has announced the pricing of a private offering of senior unsecured notes.
The offering consists of €300 million in euro-denominated notes and $350 million in U.S. dollar-denominated notes, both due in 2032. The Euro Notes will carry an interest rate of 5.375% per annum, while the USD Notes will have an interest rate of 6.375% per annum, with both payable semi-annually in arrears.
The company's subsidiaries will guarantee the notes on a senior unsecured basis. The offering is expected to close on August 8, 2024, contingent upon customary closing conditions.
Constellium intends to use the net proceeds, along with cash on hand, to redeem its outstanding 5.875% Senior Notes and 4.250% Senior Notes, both due in 2026, and to cover related fees and expenses. The redemption of these 2026 Notes is scheduled for August 26, 2024, at a redemption price of 100% of the principal amount plus accrued and unpaid interest.
This notes offering is aimed at qualified institutional buyers in the United States under Rule 144A and to non-U.S. persons under Regulation S of the Securities Act of 1933, as amended. The notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the U.S. without registration or an applicable exemption from such requirements.
The press release emphasizes that the notes are not intended for retail investors in the European Economic Area (EEA) or the United Kingdom, in compliance with the respective regulations that govern retail investing. The target market for these notes has been identified as eligible counterparties and professional clients only.
Constellium, listed on the New York Stock Exchange, reported revenues of €7.2 billion in 2023. The company's forward-looking statements in the press release highlight its expectations and beliefs regarding future operations and financial performance, acknowledging that these are subject to various risks and uncertainties.
This news is based on a press release statement from Constellium Paris.
InvestingPro Insights
Constellium SE's (NYSE: CSTM) latest strategic move to price a substantial private offering of senior unsecured notes is a testament to its proactive management of capital structure. A glance at the real-time data from InvestingPro shows a company that is navigating the market with a keen eye on profitability and shareholder value.
InvestingPro Data metrics reveal a market capitalization of $2.55 billion, underscoring the company's substantial presence in the aluminum products sector. The P/E ratio, which stands at 14.58, reflects a valuation that may catch the interest of investors looking for potentially undervalized opportunities.
Moreover, Constellium's strong free cash flow yield is implied by the adjusted P/E ratio of 16.64 for the last twelve months as of Q2 2024, which aligns with the company's strategic financial decisions, such as the recent notes offering.
Among the InvestingPro Tips, two particularly resonate with the company's current activities: Management's aggressive share buybacks and high shareholder yield suggest a confident outlook on the company's financial health and future prospects. These actions, coupled with the prediction from analysts that Constellium will be profitable this year, paint a picture of a company on solid footing.
It is worth noting that while Constellium does not pay dividends, the combination of share buybacks and a focus on increasing shareholder value could be appealing to certain investment strategies. For investors interested in a deeper dive into Constellium's financials and market performance, there are additional InvestingPro Tips available at https://www.investing.com/pro/CSTM. These insights could provide a more nuanced understanding of the company's position and future trajectory.
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