MENOMONEE FALLS, Wis. - Kohl’s Corporation (NYSE: KSS) announced the pricing of a private offering of $360 million in senior secured notes with a 10% interest rate, maturing in 2030. The offering comes as the retailer, currently valued at $934 million in market capitalization, manages its $7.16 billion total debt position with a current ratio of 1.08. The offering, which involves guarantees from Kohl’s subsidiaries, is backed by collateral including 11 distribution centers and e-commerce fulfillment facilities within a newly-formed holding company. The transaction is expected to be finalized by May 30, 2025, subject to standard closing conditions. According to InvestingPro analysis, Kohl’s maintains a FAIR financial health score, with detailed metrics and comprehensive debt analysis available in the Pro Research Report, covering this and 1,400+ other US stocks.
The company plans to use the net proceeds from the notes to repay borrowings under its revolving credit facility. Specifically, Kohl’s aims to clear its 4.25% notes due in 2025 at their maturity by borrowing under its revolving credit facility.
These senior secured notes have not been registered under the Securities Act of 1933 or any state securities laws, and as such, cannot be sold in the United States without registration or an exemption from registration requirements. The notes are being offered only to qualified institutional buyers and non-U.S. persons in compliance with Regulation S.
Kohl’s, a major omnichannel retailer, operates over 1,100 stores across 49 states, an online store, and a mobile app. The company emphasizes its commitment to delivering value and convenience to its customers while also making a positive impact in the communities it serves. With annual revenue of $16.22 billion and a significant dividend yield of 5.97%, the company trades at a notably low Price/Book ratio of 0.25. InvestingPro analysis indicates the stock is currently undervalued, with additional insights available through their comprehensive valuation tools.
This press release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from projected results. These statements are based on current management views and assumptions and are qualified by cautionary statements that address potential risks and uncertainties outlined in Kohl’s annual and other reports filed with the U.S. Securities and Exchange Commission.
The information in this article is based on a press release statement from Kohl’s Corporation.
In other recent news, Kohl’s Corporation has been in the spotlight due to a series of significant developments. Moody’s Ratings downgraded Kohl’s corporate family rating to B2 from Ba3, citing anticipated challenges in operating performance and consumer spending pressures. Despite a decline in sales, the company’s revenue for fiscal year 2024 was approximately $16.2 billion. Kohl’s also announced a $360 million secured note offering, with proceeds intended to repay existing debt. This move is part of Kohl’s strategy to efficiently manage its debt portfolio.
Analyst actions have also impacted Kohl’s, with Barclays assigning an Underweight rating and setting a price target at $4, reflecting concerns over cost pressures and market share challenges. BofA Securities reduced the price target to $7 and maintained an Underperform rating, following an executive shake-up. Fitch Ratings downgraded Kohl’s to ’BB-’ due to operational challenges and a negative outlook, projecting a potential 15% to 20% decline in EBITDA for 2025. Despite these challenges, Kohl’s plans to invest $400 million in capital expenditures to support growth initiatives.
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