Unisys Announces Early Redemption of $198 Million Senior Notes

Strategic Insights -

Unisys Corp., a leading technology and services company, has announced plans to redeem its $198 million of 9 1/2% senior notes due on July 15, 1998, eight months prior to their scheduled maturity. The company aims to reduce its debt by $1 billion by the year 2000, and this move is part of its aggressive program to achieve this goal. Under the early redemption plan, the notes will be repaid at par plus accrued interest on February 5, 1998.

Key Takeaways:

  • Unisys is redeeming $198 million of 9 1/2% senior notes due on July 15, 1998, eight months in advance.
  • The early redemption is part of Unisys' debt reduction program, which aims to reduce its $2.3 billion debt by $1 billion by the year 2000.
  • The company has already converted more than $600 million in notes to common stock in the fourth quarter of 1997.
  • The early redemption of the 9 1/2% senior notes will save Unisys approximately $8 million in additional interest expense in 1998.
  • Unisys has announced that the two prior note conversions to equity will save more than $50 million in cash and interest expense annually.
  • Lawrence A. Weinbach, Unisys Chairman, President, and CEO, emphasized the importance of strengthening the company's balance sheet to accelerate profitable growth.
  • Unisys' debt reduction program aims to pay off $1 billion in debt by the year 2000, representing a significant portion of its $2.3 billion debt burden.

Statistics:

  • $198 million: The total amount of 9 1/2% senior notes being redeemed.
  • July 15, 1998: Initial maturity date of the notes.
  • February 5, 1998: Date of early redemption of the notes.
  • $2.3 billion: Unisys' total debt burden.
  • $1 billion: Target debt reduction by the year 2000.
  • $600 million: Amount of notes converted to common stock in the fourth quarter of 1997.
  • $50 million: Annual savings from converting notes to equity.
  • $8 million: Additional interest expense savings in 1998 from early redemption of the 9 1/2% senior notes.

Sources:

  • "Unisys Calls for Early Redemption of Senior Notes," Business Wire, January 6, 1998.