Aptiv (APTV) Soon-to-Spinoff Subsidiary Prices $1.6B Debt Offering

Aptiv PLC (NYSE:APTV) is among the 10 most undervalued stocks to buy and hold for 10 years.

On March 4, Aptiv PLC (NYSE:APTV) announced that subsidiaries of its Electrical Distribution Systems segment priced a private offering of $1.6 billion in senior notes, consisting of $800 million in 6.125% senior notes due 2031 and $800 million in 6.375% senior notes due 2034. The size of the offering, issued by Cyprium Corp. and Cyprium Holdings Luxembourg, represents a $100 million increase from the previously announced $1.5 billion offering. The issuers also entered into a $850 million senior secured revolving credit facility and a $500 million senior secured term loan credit facility.

The subsidiaries are part of Versigent, the holding company for Aptiv’s Electrical Distribution Systems segment, which Aptiv PLC (NYSE:APTV) plans to separate through a spinoff to shareholders. The offering is expected to close on March 18, subject to customary closing conditions.

After the spinoff, the issuers plan to use proceeds from the offering and borrowings under the term loan facility to fund a dividend to Aptiv PLC (NYSE:APTV). Versigent will retain $400 million in cash on its balance sheet after the dividend and payment of fees and expenses related to the financing transactions. The retained amount will be used for general corporate purposes.

Aptiv PLC (NYSE:APTV) is a company that designs, develops, and manufactures software and hardware solutions.

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