Gildan prices C$700 million in senior notes

MONTREAL - Gildan Activewear Inc. (TSX:GIL and NYSE:GIL), a leading apparel manufacturer with a market capitalization of $7.27 billion, has announced the pricing of a C$700 million offering of senior unsecured notes. According to InvestingPro data, the company maintains strong financial health with an EBITDA of $814.55 million in the last twelve months. The offering includes three series of notes: C$150 million of floating rate notes due in 2028, C$200 million of 3.630% fixed rate notes also due in 2028, and C$350 million of 4.149% fixed rate notes due in 2030.

The 2028 Floating Rate Notes, due March 13, 2028, will bear interest at a rate tied to the daily compounded CORRA plus 1.26% per annum. Interest payments are scheduled quarterly starting June 13, 2025. The 2028 Fixed Rate Notes, with the same maturity date, will have a 3.630% annual interest rate, payable semi-annually beginning September 13, 2025.

The 2030 Fixed Rate Notes are priced slightly below par at $999.89 per $1,000 principal amount and will yield 4.149% per annum. These notes will mature on November 22, 2030, with semi-annual interest payments starting November 22, 2025.

Gildan intends to use the net proceeds from the offering to repay outstanding indebtedness under its credit facilities and for other general corporate purposes. The closing of the offering is expected around March 13, 2025, subject to customary conditions.

BMO Capital Markets, CIBC Capital Markets, and TD Securities are acting as joint bookrunners for the offering, with J.P. Morgan, BofA Securities, RBC Capital Markets, and Scotiabank serving as co-managers.

The notes will be senior unsecured obligations of Gildan, ranking equally with all existing and future senior unsecured and unsubordinated indebtedness. DBRS Limited has assigned a provisional rating of BBB with a stable trend to the notes. InvestingPro analysis shows that Gildan operates with a moderate level of debt while maintaining strong liquidity, with a healthy current ratio of 2.22 and liquid assets exceeding short-term obligations.

The company has specified that the notes will not be offered or sold under the United States Securities Act of 1933 or any state securities laws and will be exempt from the prospectus requirements of Canadian securities laws.

This press release includes forward-looking statements, as defined by the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities legislation, regarding the timing and completion of the proposed offering, the use of net proceeds, and credit ratings. These statements are subject to risks, uncertainties, and assumptions, which may cause actual results to differ materially from those projected.

Gildan is known for its manufacturing of everyday basic apparel, including activewear, underwear, and socks, which are distributed across North America, Europe, Asia Pacific, and Latin America. The company emphasizes its commitment to industry-leading labor, environmental, and governance practices. InvestingPro analysis indicates the company’s overall financial health is rated as GOOD, with particularly strong scores in profitability and price momentum. Discover more insights about Gildan and 1,400+ other companies through comprehensive Pro Research Reports, available exclusively to InvestingPro subscribers.

The information in this article is based on a press release statement from Gildan Activewear Inc.

In other recent news, Gildan Activewear announced its fourth-quarter 2024 earnings, surpassing market expectations with an earnings per share (EPS) of $0.83, compared to the forecasted $0.81. The company reported a revenue of $822 million, exceeding the expected $811.1 million, marking a 5% year-over-year increase. BMO Capital Markets responded by raising Gildan’s stock price target to $64, maintaining an Outperform rating due to these strong financial results and the company’s growth potential. Additionally, Gildan provided 2025 guidance that aligned with analyst projections, anticipating mid-single-digit revenue growth and an adjusted EPS increase of 13-19%.

Significant organizational changes were also announced, including the planned retirement of the Chief Financial Officer and the appointment of a new Chief Operating Officer. Gildan’s management expressed confidence in sustained organic growth, with 75% of the 2025 growth expected from new programs and 25% from market share gains. Innovations such as the Comfort Colors brand and Soft Cotton technology are highlighted as key drivers for expansion. The company’s strategic initiatives and operational efficiencies have positioned it well in a competitive market, with analysts highlighting Gildan’s competitive advantage in low-cost manufacturing as a significant strength.

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