Otis Worldwide Corporation (OTIS, Financial) has announced the issuance of $600 million in aggregate principal amount of its 5.125% Notes due 2031. This strategic move is part of the company's efforts to enhance its financial flexibility and support its growth initiatives. The notes were registered under the Securities Act of 1933 and are expected to generate net proceeds of approximately $594.5 million after underwriting discounts and offering expenses.
The Otis Notes will bear interest at a rate of 5.125% per annum, with interest payments scheduled for May 19 and November 19 each year, starting May 19, 2025. The company retains the option to redeem the notes prior to September 19, 2031, with a "make-whole" premium, and at par thereafter.
In a parallel move, Highland Holdings S.à r.l., an indirect wholly-owned subsidiary of Otis Worldwide, issued €850 million in aggregate principal amount of 2.875% Notes due 2027. These notes are fully guaranteed by Otis Worldwide and are expected to yield net proceeds of approximately €842 million, or $902 million, based on current exchange rates.
The proceeds from both offerings are intended to fund the repayment of Otis Worldwide's 2.056% notes due April 5, 2025, and to address other corporate financial needs, including the repayment of commercial paper borrowings.
These strategic debt issuances underscore Otis Worldwide's commitment to maintaining a robust capital structure while supporting its long-term growth objectives. Investors and stakeholders can expect continued updates as the company leverages these financial instruments to enhance its market position.
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