Under Armour plans to offer $400 million in senior notes

BALTIMORE - Under Armour, Inc. (NYSE: UA, UAA), the athletic apparel maker with a market capitalization of $2.73 billion, announced Monday its intention to offer $400 million in senior unsecured notes due 2030, subject to market conditions.

The sportswear company said the notes will bear interest semiannually and will be guaranteed by Under Armour subsidiaries that provide guarantees under its amended revolving credit agreement. The interest rate and offering price will be determined through negotiations with initial purchasers. According to InvestingPro data, the company currently operates with a moderate debt level, maintaining a healthy current ratio of 2.1.

Under Armour plans to use the proceeds from this offering, along with potential borrowings under its credit agreement or cash on hand, to retire all $600 million of its outstanding 3.25% Senior Notes due 2026. This refinancing comes as part of the company’s debt management strategy, with total debt currently standing at $1.3 billion.

The notes will be offered privately to qualified institutional buyers under Rule 144A of the Securities Act of 1933 and to certain non-U.S. persons under Regulation S. The offering has not been registered under the Securities Act.

The Baltimore-based athletic apparel maker noted that the completion of the offering is not guaranteed and will depend on favorable terms and market conditions.

Under Armour designs, markets and distributes athletic performance apparel, footwear and accessories. The announcement was made in a press release statement from the company.

In other recent news, Under Armour has reported improved gross margins in its latest quarterly report, despite experiencing a decrease in revenue. The company is focusing on strengthening its financial foundation, prioritizing long-term stability over immediate revenue growth. In a separate development, Moody’s has downgraded Under Armour’s credit rating to Ba3, citing a negative outlook due to anticipated decreased earnings and increased tariff costs over the next 12-18 months. This downgrade reflects concerns about weakened consumer spending and the impact of tariffs on the company’s turnaround strategy.

Additionally, Under Armour, along with other major footwear companies, has sought tariff exemptions from the Trump administration, arguing that current tariffs could significantly raise consumer costs and potentially lead to business closures. On the corporate governance front, Under Armour has expanded its Board of Directors by adding three new members, including Dawn N. Fitzpatrick, Eugene D. Smith, and Robert J. Sweeney, who bring diverse expertise in finance, sports management, and investment.

BMO Capital Markets recently adjusted its price target for Under Armour shares from $12.00 to $9.00, maintaining an Outperform rating. The firm expressed optimism about Under Armour’s strategy to focus on financial health and margin expansion. Despite the challenges, Under Armour continues to emphasize its commitment to creating value for stakeholders and navigating the evolving athletic performance market.

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