Energizer saves big on interest expense from year’s debt refinancings

By Devika Patel

Knoxville, Tenn., May 10 – Energizer Holdings, Inc. saved $8 million in interest expense last quarter and expects to save $30 million for the whole year, thanks to a refinancing of its debt, including the refi of $600 million of 7¾% senior notes due 2027 done in January.

“We’ve taken advantage of favorable debt markets and refinanced a significant portion of our debt over the last 12 months,” executive vice president and chief financial officer Timothy W. Gorman said on the company’s second quarter ended March 31 earnings conference call on Monday.

“We expect these refinancings to contribute to a $30 million reduction in our 2021 interest expense, of which $8 million was realized in the second quarter,” he said.

Net debt to credit-defined EBITDA was 4.8x as of March 31.

Cash and cash equivalents were $261 million as of March 31, compared to $459.8 million as of Sept. 30, 2020.

Long-term debt was $3,352,200,000 as of March 31, compared to $3,306,900,000 as of Sept. 30, 2020.

On Dec. 8, Energizer said it would redeem all $600 million of its 7¾% senior notes due 2027.

The redemption had been conditioned upon, among other things, the consummation of a senior secured incremental term loan credit facility in an amount of $650 million under an amended and restated credit agreement to be entered into on or around Dec. 22.

Energizer entered into an amendment to its credit agreement with JPMorgan Chase Bank, NA on Dec. 22 to borrow an incremental term loan of $650 million.

The new loan has the same interest rate, maturity date, amortization schedule, collateral and other terms as Energizer’s existing term loan.

Proceeds from the new facility will be used to redeem the $600 million 7¾% notes due 2027.

On Jan. 7, the company reported that it had satisfied all conditions to fully redeem the notes and said the notes would be redeemed at $1,110.964735 per $1,000 of notes plus interest of $37.24305555 per $1,000 of notes, for a total amount payable of $1,148.20779055 per $1,000 of notes Jan. 8.

Energizer is a St. Louis-based manufacturer of batteries.

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