Carrier Global (NYSE:CARR) Corporation, a leading provider of air conditioning and refrigeration solutions, announced today that it has priced a private offering of €750 million in 3.625% euro-denominated notes due in 2037. The offering is slated to close on November 8, 2024, subject to customary closing conditions.
The company intends to use the net proceeds from the sale of the notes, along with available cash, to redeem all of its outstanding 4.375% Euro-denominated Notes due in 2025. The redemption of the Euro 2025 Notes is part of Carrier's financial strategy, although this report does not serve as the formal notice of redemption for those notes.
The newly priced notes were offered exclusively to qualified institutional buyers under Rule 144A or to non-U.S. persons in compliance with Regulation S, both under the Securities Act of 1933. These notes have not been registered under the Securities Act or any state securities laws and, therefore, cannot be sold in the United States without registration or an exemption from registration requirements.
In other recent news, Carrier Global Corporation has reported robust Q3 earnings, with sales increasing by 21% to $6 billion and organic sales growing by 4%. The company's HVAC segment saw a 26% increase in sales, largely due to the acquisition of Viessmann Climate Solutions. Adjusted EPS from continuing operations was $0.77, a 3% increase year-over-year. Carrier Global also announced a conditional notice of redemption for its 4.375% Euro Notes due in 2025, planning to redeem all €750 million of the outstanding notes.
To fund this redemption, the company initiated a private offering of €750 million aggregate principal amount of euro-denominated notes due in 2037, alongside available cash on hand. Additionally, Baird maintained an Outperform rating on Carrier Global but reduced the price target to $86.00 from $88.00, while Oppenheimer also maintained an Outperform rating and $88.00 price target for the company.
Mizuho, on the other hand, held Carrier Global at Neutral with a $78 target. Lastly, Carrier Global repurchased $400 million in shares in Q3 and plans to reach $1 billion in buybacks by year's end.
InvestingPro Insights
Carrier Global Corporation's recent financial move to refinance its debt aligns with its overall financial health and market position. According to InvestingPro data, Carrier boasts a substantial market capitalization of $68.01 billion, underlining its significant presence in the Building Products industry. The company's revenue growth of 25.64% over the last twelve months demonstrates strong financial performance, which may have contributed to its ability to secure favorable terms for the new euro-denominated notes.
InvestingPro Tips highlight that Carrier has raised its dividend for 4 consecutive years, indicating a commitment to shareholder returns. This consistent dividend growth, coupled with a current dividend yield of 1.03%, may appeal to income-focused investors. Additionally, the company operates with a moderate level of debt, which suggests that this refinancing move is part of a prudent financial strategy rather than a necessity driven by excessive leverage.
It's worth noting that Carrier's stock has shown impressive performance, with a 60.46% total return over the past year. This strong market performance, combined with the company's solid financials, may have positioned Carrier favorably in the debt markets, potentially allowing it to secure the 3.625% interest rate on the new notes.
For investors seeking more comprehensive analysis, InvestingPro offers 14 additional tips on Carrier Global Corporation, providing deeper insights into the company's financial outlook and market position.
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