Wesco to issue $600 million in senior notes for debt management

PITTSBURGH - WESCO International, Inc. (NYSE: WCC), a prominent player in the distribution and supply chain solutions sector with a market capitalization of $8.7 billion, revealed plans through its subsidiary, WESCO Distribution, to offer $600 million in senior notes due 2033 to qualified institutional buyers and certain non-U.S. persons, in line with market conditions and other factors. According to InvestingPro data, the company maintains a strong financial health rating of "GOOD," supported by robust liquidity metrics.

The company has stated that the proceeds from these senior notes will be used primarily to redeem its 10.625% Series A Fixed-Rate Reset Cumulative Perpetual Preferred Stock and associated depositary shares on June 22, 2025. Before this redemption, the funds will be allocated to reduce the outstanding amounts under Wesco’s asset-based revolving credit facility and its accounts receivable securitization facility. The company’s current total debt stands at $5.85 billion, while maintaining a healthy current ratio of 2.2, indicating strong ability to meet short-term obligations.

The notes, which will not be secured by collateral, will be ranked equally with WESCO Distribution’s other existing and future unsecured debt. Furthermore, the notes will be backed by guarantees from both Wesco and its wholly owned subsidiary, Anixter Inc.

The offering of the notes will be conducted under Rule 144A and Regulation S of the Securities Act of 1933, as amended, indicating that they will not be registered under the Securities Act and are subject to certain restrictions on their sale in the U.S.

WESCO’s announcement is a strategic move for its financial management, aiming to streamline its capital structure by addressing its preferred stock obligations and reducing its credit facility borrowings. This decision comes as part of the company’s broader efforts to optimize its balance sheet and enhance financial flexibility. InvestingPro analysis reveals the company’s stock has shown significant volatility recently, with additional insights available through the comprehensive Pro Research Report, which provides detailed analysis of WESCO’s financial strategy and market position among 1,400+ top US stocks.

Investors should note that this press release does not constitute an offer to sell or a solicitation of an offer to buy the notes or any other securities, nor does it serve as a notice of redemption for the Series A Preferred Stock and the related depositary shares.

The information provided is based on a press release statement from WESCO International.

In other recent news, WESCO International reported fourth-quarter adjusted earnings per share of $3.16, which fell short of analyst expectations of $3.25. However, the company’s revenue exceeded projections, reaching $5.5 billion compared to the expected $5.41 billion. WESCO’s sales rose 0.5% year-over-year, with notable growth in its global data center and broadband solutions businesses. For the full year 2024, WESCO reported net sales of $21.8 billion, a 2.5% decrease from the previous year, while achieving record operating cash flow of $1.1 billion.

Looking ahead, WESCO anticipates organic sales growth of 2.5% to 6.5% in 2025 and plans to increase its common stock dividend by 10%. Analysts from KeyBanc and Oppenheimer have maintained positive ratings on WESCO, with price targets of $245 and $225, respectively. Despite challenges in the industrial and utility segments, WESCO’s strong performance in data centers and electrification supports its favorable outlook. KeyBanc highlighted the company’s improved organic growth and profit margins, while Oppenheimer noted the company’s sales and free cash flow guidance for 2025. These developments reflect a mixed but cautiously optimistic view of WESCO’s future performance.

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