Icahn Enterprises to offer $500 million of high-yield six-year bonds

By Ciara Linnane

Proceeds will be used to redeem the 6.375% notes that mature in 2025

Icahn Enterprises L.P. said Monday it intends to offer $500 million of high-yield six-year notes in a private placement.

The investing arm of billionaire activist investor Carl Icahn said proceeds will be used along with cash on hand to redeem the existing 6.375% notes that mature in 2025.

IEP (IEP) has a BB rating from S&P Global Ratings.

The company's outstanding bonds saw net buying Monday - a bullish sign ahead of new supply.

The company has more than $6 billion in bonds outstanding, according to FactSet. The bulk is due to mature in 2027 and 2029.

The deal comes a week after IEP reported its latest quarter's financials, narrowing its first-quarter loss of $38 million, or 9 cents a share, for the quarter, narrower than the loss of $270 million, or 75 cents a share, posted in the year-earlier period.

Crucially, the company said it still intends to pay its $1 dividend, which it halved last August after a bruising short-seller report questioned its financials and ability to keep up the quarterly distribution.

Icahn Enterprises, which is 84% owned by Icahn and his son, Brett, offers exposure to Icahn's personal portfolio of public and private companies, including petroleum refineries, car-parts makers, food-packaging companies and real estate.

The report by short-seller Hindenburg Research accused the company of overstating values, among other issues. Carl Icahn has responded several times questioning the validity of the report and the motivation of its author.

The stock rose 3% Monday and has gained 8% in the year to date, while the S&P 500 has gained 9.5%.

-Ciara Linnane

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05-13-24 1247ET

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