Avery Dennison's €500 Million Senior Notes Offering: A Strategic Refinancing Move

Avery Dennison Corporation (NYSE: AVY) has priced an underwritten public offering of €500 million aggregate principal amount of 3.750% Senior Notes due 2034. The Senior Notes were priced at 99.672% of their principal amount, with the offering expected to close on November 4, 2024, subject to customary closing conditions. Avery Dennison intends to use the net proceeds from the offering to repay in full the €500 million aggregate principal amount of its 1.250% senior notes due 2025 when they mature on March 3, 2025, and for general corporate purposes.

The joint book-running managers for this offering are Merrill Lynch International, Mizuho International plc, SMBC Bank International plc, Citigroup Global Markets Limited, Goldman Sachs & Co. LLC, HSBC Continental Europe, J.P. Morgan Securities plc, and PNC Capital Markets LLC, with Academy Securities, Inc., ING Bank N.V., Belgian Branch, Loop Capital Markets LLC, and Standard Chartered Bank as co-managers.

Avery Dennison's strategic refinancing move reflects its proactive approach to managing its debt maturity schedule and optimizing its capital structure. By issuing new Senior Notes at a higher interest rate, the company is addressing the upcoming maturity of its existing 1.250% notes and securing a longer-term financing solution. This proactive approach eliminates near-term refinancing risk and provides certainty in Avery Dennison's capital structure.


The pricing at 99.672% of par indicates a solid market reception for Avery Dennison's offering. The slight discount suggests that investors are willing to accept a lower price in exchange for the notes' higher yield, reflecting their confidence in Avery Dennison's creditworthiness. The offering's success will strengthen Avery Dennison's liquidity position, enabling it to repay its maturing debt and invest in growth opportunities.

While the higher interest rate of 3.750% compared to the existing 1.250% notes will increase Avery Dennison's borrowing costs, the company maintains its credit profile by effectively managing its debt maturity schedule and addressing near-term refinancing risks. Avery Dennison's strong banking syndicate supporting the offering further bolsters the company's credit profile.


In conclusion, Avery Dennison's €500 million senior notes offering is a strategic refinancing move that addresses the upcoming maturity of its existing debt and secures a longer-term financing solution. The offering's solid market reception and the company's proactive approach to debt management demonstrate Avery Dennison's commitment to maintaining a strong credit profile and optimizing its capital structure. Investors should consider Avery Dennison's income-focused strategy and stable cash flows when evaluating the company as a potential investment opportunity.