MONTREAL - Gildan Activewear Inc . (TSX:NYSE:GIL and NYSE:GIL), a manufacturer of everyday basic apparel, has announced the pricing of its inaugural offering of C$700 million in senior unsecured notes. The offering is divided into two series: C$500 million of 4.362% senior unsecured notes due 2029 and C$200 million of 4.711% senior unsecured notes due 2031.
The 2029 notes, due May 22, 2029, and the 2031 notes, due November 22, 2031, will both be issued at par value. Interest on the 2029 notes is payable semi-annually at a rate of 4.362%, and for the 2031 notes at a rate of 4.711%, with payments beginning on May 22, 2025.
Gildan intends to use the net proceeds from the sale of these notes for the repayment of existing debt under its credit facilities and for other general corporate purposes. The notes will rank equally with all existing and future senior unsecured and unsubordinated indebtedness of the company.
The offering is being managed by a syndicate of financial institutions, including BMO Capital Markets, CIBC (TSX:CM) Capital Markets, and Scotiabank (TSX:BNS) as joint bookrunners. Co-managers include J.P. Morgan, TD Securities, BofA Securities, and RBC Capital Markets. The closing of the offering is anticipated to occur on or about November 22, 2024, subject to customary closing conditions.
DBRS Limited has provisionally rated the notes at BBB with a stable trend. The notes are being offered in Canada on a private placement basis, exempt from prospectus requirements, and will not be registered under the U.S. Securities Act of 1933 or any state securities laws, making them unavailable for sale in the United States to U.S. persons.
Forward-looking statements in the press release regarding the offering's timing, completion, and anticipated use of proceeds are subject to risks and uncertainties. Factors that could cause actual results to differ materially from expectations include changes in economic conditions and the company's ability to execute its growth strategies.
Gildan, known for its commitment to labor, environmental, and governance practices, operates large-scale manufacturing facilities in regions including Central America, the Caribbean, North America, and Bangladesh. The company offers a variety of products like activewear, underwear, and socks under brands such as Gildan®, American Apparel®, Comfort Colors®, GOLDTOE®, and Peds®.
This news article is based on a press release statement from Gildan Activewear Inc.
In other recent news, Gildan Activewear (TSX:GIL) reported record Q3 sales and earnings per share (EPS) growth in its Third Quarter 2024 Earnings Call. The company announced a year-over-year sales increase of 2.4% to $891 million, with an adjusted operating margin of 22.4% and an adjusted diluted EPS of $0.85, up 15%. Gildan Activewear returned $404 million to shareholders in Q3, totaling $643 million for the year. Despite the phase-out of Under Armour (NYSE:UA), the company noted a 6% sales increase in Activewear during Q3, with fleece products expected to continue their growth trajectory. The company's outlook includes mid-single-digit sales growth and improved operating margins through 2025. Guidance for full-year 2024 adjusted diluted EPS has been raised to between $2.97 and $3.02. These are recent developments in Gildan Activewear's financial performance and strategic direction.
InvestingPro Insights
Gildan Activewear's recent announcement of its C$700 million senior unsecured notes offering aligns with several key financial indicators and trends highlighted by InvestingPro data. The company's decision to issue debt comes at a time when it's operating with a moderate level of debt, as noted in one of the InvestingPro Tips. This strategic move could potentially optimize Gildan's capital structure while taking advantage of its strong financial position.
The company's solid financial footing is further evidenced by its impressive market performance. InvestingPro data shows that Gildan's stock has seen a strong return over the last three months, with a 15.58% price total return. Even more striking is the 37.7% return over the past six months, indicating robust investor confidence in the company's direction.
Gildan's ability to raise substantial debt at competitive interest rates is likely supported by its strong operational performance. The company boasts an operating income margin of 20.79% for the last twelve months as of Q3 2024, demonstrating efficient management and healthy profitability. This solid financial performance is also reflected in the company's dividend policy, with InvestingPro Tips highlighting that Gildan has raised its dividend for 4 consecutive years and maintained dividend payments for 14 consecutive years.
It's worth noting that InvestingPro offers 14 additional tips for Gildan Activewear, providing investors with a comprehensive view of the company's financial health and market position. These insights can be particularly valuable when assessing the potential impact of significant financial decisions like the recent notes offering.
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