Constellation Brands prices $500 million senior notes offering

ROCHESTER, N.Y. - Constellation Brands, Inc. (NYSE: STZ), a prominent beverage alcohol company with a market capitalization of $33.1 billion, has priced a public offering of senior notes valued at $500 million, the company announced on Tuesday. According to InvestingPro data, the company maintains a "Fair" overall financial health score, suggesting stable operational performance. The 4.800% Senior Notes, due in 2030, were priced at 99.824% of their principal amount.

The notes, which are scheduled to close on May 1, 2025, subject to customary closing conditions, will be senior unsecured obligations and will rank equally with all other senior unsecured indebtedness of the company. Constellation Brands plans to allocate the net proceeds from the offering towards general corporate purposes. These include repayment of commercial paper, reduction of other debts, working capital, funding capital expenditures, and exploring other business opportunities. InvestingPro analysis reveals the company has raised its dividend for 10 consecutive years, with a current dividend yield of 2.2% and impressive dividend growth of 14.6% over the last twelve months.

BofA Securities, Inc., BNP Paribas Securities Corp., Goldman Sachs & Co. LLC, and J.P. Morgan Securities LLC are serving as the joint book-running managers for the offering. The notes are available only through a prospectus and a prospectus supplement, which interested parties can obtain from the respective managing firms.

Constellation Brands, with operations across the U.S., Mexico, New Zealand, and Italy, boasts a portfolio that includes well-known brands such as Modelo Especial, Corona Extra, and Robert Mondavi Winery.

The company has clarified that this announcement is not an offer to sell or a solicitation of an offer to buy the notes. The sale of the notes will not proceed in any state or jurisdiction where such an offer, solicitation, or sale would be unlawful.

This news release includes forward-looking statements, which are subject to risks and uncertainties and should not be regarded as a guarantee of future performance. These statements are based on current expectations as of the date of the news release. The company has no obligation to update or revise any forward-looking statements due to new information or future events. InvestingPro analysis indicates the company is currently trading below its Fair Value, with annual revenue of $10.2 billion and EBITDA of $4 billion. Management has been actively buying back shares, one of several key insights available in the comprehensive Pro Research Report, which provides detailed analysis of 1,400+ top stocks.

The announcement is based on a press release statement from Constellation Brands, Inc. and further details regarding risk factors related to the company and the offering are documented in the company’s SEC filings, including the prospectus and prospectus supplement for the offering.

In other recent news, Constellation Brands has made significant financial and strategic moves. The company entered into an amended credit agreement, refinancing its $2.25 billion senior unsecured revolving credit facility and extending its maturity to 2030. This adjustment, facilitated by Bank of America, is designed to enhance the company’s financial flexibility. Moody’s has upgraded Constellation Brands’ senior unsecured ratings from Baa3 to Baa2, citing expectations of stable debt-to-EBITDA ratios and strong margins. In leadership changes, Paula Erickson will join as Executive Vice President and Chief Human Resources Officer in 2025, succeeding Kris Carey. Meanwhile, RBC Capital Markets and Jefferies have both adjusted their price targets for Constellation Brands, with RBC lowering its target to $233 and Jefferies to $196, while maintaining an Outperform and Hold rating, respectively. These adjustments reflect demand challenges and anticipated slower growth in the beer segment. The company’s strategic divestiture of mainstream wine brands and reduction in capital expenditures are seen as positive steps for future performance.

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