Hanesbrands announces redemption of senior notes

Today, Hanesbrands Inc. (NYSE:HBI), a leading apparel retailer with a market capitalization of $2.03 billion, confirmed the completion of conditions necessary for the redemption of its 4.875% Senior Notes due in 2026. According to InvestingPro data, the company carries total debt of $2.55 billion and maintains a current ratio of 1.37. The company had previously elected to redeem these outstanding notes, with an original aggregate principal amount of $900 million, on February 13, 2025.

The redemption date is set for March 17, 2025, and the company has fulfilled the requirement of securing sufficient net proceeds from one or more debt financings to cover the redemption price and associated costs. Hanesbrands notified the U.S. Bank Trust Company, National Association, the trustee overseeing the indenture governing the notes, that the conditions for redemption had been met. This debt management move comes as InvestingPro analysis shows the company working to improve its financial health, though it wasn’t profitable over the last twelve months.

The notes will be redeemed at a price of 100.154904% of their principal amount, equating to $1,001.54904 per $1,000 of principal, plus any accrued and unpaid interest up to, but not including, the redemption date.

This action is part of Hanesbrands’ financial management and is not a solicitation of material pursuant to any section of the Securities Exchange Act of 1934. Moreover, this news article is based on the company’s statement in the SEC filing and does not constitute a notice of redemption for the notes.

In other recent news, Hanesbrands Inc. reported significant financial developments, including the expansion of its term loan B to $1.1 billion, which led S&P Global Ratings to downgrade its credit rating from ’BB’ to ’BB-’. This adjustment reflects an increased secured debt load, though S&P anticipates improved credit metrics due to operational enhancements and debt reduction efforts. Moody’s Ratings, however, maintained its stable outlook for Hanesbrands, noting that the upsized term loan will not affect its ratings as it is intended to refinance existing debt. UBS analysts reiterated their Buy rating with an $11 price target, citing strong fourth-quarter results and a positive long-term outlook, despite a planned CEO transition that has concerned some investors.

Conversely, Citi analysts revised their outlook, lowering the stock price target to $7 due to concerns about future guidance and valuation. Hanesbrands’ fourth-quarter gross margin exceeded expectations, but the forecast for fiscal year 2025 suggests a more modest growth rate. S&P Global affirmed Hanesbrands’ ’B+’ issuer credit rating and revised the credit outlook to positive, highlighting improved leverage following the sale of its Champion business and debt reduction strategies. Despite a slight decline in net sales to $3.50 billion in 2024, Hanesbrands plans to focus on operational improvements and debt reduction in the coming years. The company aims to increase cash flow and reduce leverage, with no immediate plans to return capital to shareholders until achieving a more favorable debt ratio.

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