OneMain Holdings issues $600M in Senior Notes

OneMain Holdings, Inc. (NYSE:OMF), a personal credit institution with a market capitalization of $5.4 billion, announced on Thursday the issuance of $600 million in senior notes due 2032. According to InvestingPro data, the company maintains strong liquidity with current assets well exceeding short-term obligations. The 6.750% notes, guaranteed by OneMain Holdings, were sold in a public offering under a registration statement filed with the SEC. This adds to the company’s existing total debt of $21.6 billion, though InvestingPro analysis indicates the stock is currently trading below its Fair Value.

The notes, which will mature on March 15, 2032, will pay interest semiannually starting September 15, 2025. They are senior unsecured obligations of OneMain Finance Corporation, a subsidiary of OneMain Holdings, and rank equally with its other unsubordinated debt. The notes are guaranteed by OneMain Holdings but not by any of its subsidiaries.

OneMain Holdings has the option to redeem the notes in whole or in part before March 15, 2028, at a make-whole redemption price, or on and after this date at a declining redemption price, plus accrued interest. The indenture includes covenants limiting the company’s ability to incur liens and to merge or sell assets. It also outlines events of default, which, upon occurrence, may lead to the acceleration of the debt’s maturity.

This financial move is part of OneMain Holdings’ broader strategy to manage its debt portfolio. The information provided is based on a press release statement.

In other recent news, OneMain Holdings reported its fourth-quarter 2024 earnings, which narrowly missed analysts’ expectations. The company posted an earnings per share (EPS) of $1.16, just below the forecasted $1.17, and revenue of $1.17 billion, slightly missing the anticipated $1.18 billion. Despite these shortfalls, OneMain Holdings demonstrated solid growth in managed receivables, which increased by 11% to $2.47 billion. JMP Securities maintained a positive outlook on OneMain Holdings, reiterating its Market Outperform rating with a price target of $65.00, citing the company’s improving credit situation and management’s optimistic outlook. The firm noted that OneMain Holdings could potentially relax its lending restrictions if positive economic trends continue. The company’s management expressed optimism about future earnings, projecting managed receivables growth of 5-8% and revenue growth of 6-8% for 2025. They anticipate that 2024 represented a cyclical low in earnings, expecting an upward trajectory in 2025. Additionally, OneMain Holdings has been expanding its product offerings, including personal loans, credit cards, and auto lending, contributing to its overall performance.

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