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Science Applications International Corporation (NASDAQ:SAIC) announced Thursday it has closed a private offering of $500 million aggregate principal amount of 5.875% Senior Notes due 2033. The company reported net proceeds of approximately $493 million from the offering, after deducting the initial purchasers’ discount and estimated fees and expenses.
According to a statement in the company’s SEC filing, the net proceeds will be used to repay all outstanding indebtedness under its revolving credit facility and to pay costs related to the offering. Any remaining funds may be used for general corporate purposes, including working capital and potential strategic projects and transactions.
The notes were issued under an indenture dated Thursday among Science Applications International, its guarantor subsidiaries, and U.S. Bank Trust Company, National Association, as trustee. The notes are senior unsecured obligations and are fully and unconditionally guaranteed by the company’s existing and future domestic subsidiaries that guarantee its credit facilities and certain other indebtedness.
The indenture restricts Science Applications International and its subsidiaries from incurring additional debt, paying dividends, making certain investments, disposing of assets, and entering into certain transactions, subject to specified exceptions and qualifications.
The company may redeem some or all of the notes at any time before November 1, 2028, at a price equal to 100% of the principal amount plus accrued interest and a make-whole premium. On or after November 1, 2028, the notes may be redeemed at set prices plus accrued and unpaid interest. Additionally, up to 40% of the original aggregate principal amount may be redeemed before November 1, 2028, with the net cash proceeds of certain equity offerings at a redemption price of 105.875% plus accrued interest.
If a change of control event occurs, the company may be required to offer to repurchase all of the notes at 101% of the principal amount plus accrued and unpaid interest.
This information is based on a statement in the company’s SEC filing Thursday.
In other recent news, Science Applications International Corp (SAIC) reported its Q2 FY2026 earnings, which included a significant earnings per share (EPS) beat. The company posted an EPS of $3.63, surpassing the forecast of $2.24, resulting in a 62.05% surprise. However, SAIC faced a revenue miss, recording $1.77 billion against an expected $1.87 billion, a shortfall of 5.35%. Additionally, SAIC announced the pricing of $500 million in senior notes at 5.875% due 2033, with the proceeds aimed at repaying revolving credit. JPMorgan recently downgraded SAIC’s stock rating from Overweight to Neutral, citing concerns over a weakening revenue outlook and challenges with the company’s strategic pivot. Stifel also adjusted its price target for SAIC, lowering it to $128 while maintaining a Buy rating, in response to the company’s revised revenue outlook. These developments highlight the mixed financial performance and strategic challenges SAIC is currently navigating.
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