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Keysight Technologies , Inc. (NYSE:KEYS), a leading technology company that specializes in electronic measurement instruments, announced today the issuance of $600 million in aggregate principal amount of 4.950% notes due October 15, 2034. This move is pursuant to the company's effective shelf registration statement, and the notes were sold via an underwriting agreement with BNP Paribas (OTC:BNPQY) Securities Corp., Citigroup Global Markets Inc., and BofA Securities, Inc.
The new debt is unsecured and ranks equally with current and future unsecured debts. Keysight intends to use the net proceeds for general corporate purposes, including repaying its existing $600 million 4.550% Senior Notes due on October 30, 2024.
Investors in the notes will receive interest payments semi-annually at a rate of 4.950% per annum, with the first payment due on April 15, 2025. Keysight has the option to redeem the notes, in whole or part, at any time with prior notice. The redemption price before July 15, 2034, will be either the sum of the present values of remaining payments or 100% of the principal amount, whichever is greater, plus accrued interest. After the Par Call Date, the redemption price will be 100% of the principal amount.
Furthermore, in the event of a change of control, Keysight is required to offer to repurchase the notes at 101% of their principal amount, plus accrued interest. The issuance is governed by an indenture between Keysight and U.S. Bank Trust Company, National Association, as trustee. The indenture contains customary covenants, including limitations on the company's ability to create liens on principal properties, enter into sale and leaseback transactions, and merge or consolidate with other entities.
In other recent news, Keysight Technologies has been at the forefront of several significant developments. The company reported a strong Q3 performance with revenues of $1.2 billion and earnings per share (EPS) of $1.57, surpassing expectations. Keysight has also announced the pricing of a $600 million senior unsecured fixed-rate note offering, due in 2034, with an annual interest rate of 4.950 percent, managed by BNP Paribas Securities Corp., Citigroup Global Markets Inc., and BofA Securities, Inc.
Keysight has also unveiled a range of innovative products. These include the 4881HV High Voltage Wafer Test System, designed to improve the productivity of power semiconductor manufacturers, the N7718C Optical Reference Transmitter, a significant innovation for testing advanced optical receivers, and the InfiniiVision HD3 Series oscilloscope, a device designed to detect and address signal issues across various applications.
Furthermore, Keysight has expressed intentions to pursue mergers and acquisitions. Analysts from Deutsche Bank, Baird, and Goldman Sachs have shown confidence in Keysight's future performance, raising their price targets and maintaining Buy ratings for the company.
InvestingPro Insights
Keysight Technologies' recent issuance of $600 million in notes aligns with its financial strategy, as reflected in the latest InvestingPro data. The company's market cap stands at $27.55 billion, indicating its significant presence in the electronic measurement industry. InvestingPro Tips reveal that Keysight operates with a moderate level of debt, which is consistent with its approach to debt management as seen in this new issuance.
The company's financial health appears robust, with InvestingPro data showing that liquid assets exceed short-term obligations. This liquidity position supports Keysight's ability to manage its debt effectively, including the repayment of existing notes mentioned in the article.
Despite a reported revenue decline in the last twelve months (-10.6%), analysts predict that Keysight will remain profitable this year. This forecast, coupled with the company's high return over the last decade, suggests a resilient business model capable of weathering short-term challenges.
It's worth noting that Keysight is currently trading near its 52-week high, with a price-to-earnings ratio of 30.24. This valuation indicates investor confidence in the company's future prospects, even as it navigates the current market environment and manages its debt structure.
For investors seeking a more comprehensive analysis, InvestingPro offers 5 additional tips for Keysight Technologies, providing deeper insights into the company's financial position and market performance.
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