NEW YORK - Kyndryl Holdings, Inc. (NYSE:KD), a global leader in IT infrastructure services, has successfully issued $500 million of 6.350% Senior Notes due in 2034, marking its first foray into the debt market since becoming an independent entity. The company disclosed on Monday that the proceeds from the senior notes offering will be utilized to fully repay an existing $500 million term loan, which was set to mature in November 2024.
The move to issue new debt comes as part of Kyndryl's strategy to optimize its capital structure and extend debt maturities. According to Kyndryl's Chief Financial Officer David Wyshner, the refinancing will allow the company to "rebalance our debt maturities while maintaining leverage consistent with our investment-grade credit ratings." Wyshner expressed satisfaction with the completion of the debt issuance and the positive reception from capital markets.
Kyndryl, listed on the New York Stock Exchange under the ticker KD, is recognized as the largest IT infrastructure services provider in the world. The company operates in over 60 countries, providing critical services including the design, management, and modernization of information systems essential for daily operations across various industries.
This financial maneuver is part of Kyndryl's broader efforts to strengthen its balance sheet and financial flexibility following its spin-off from IBM (NYSE:IBM) in November 2021. The offering of the senior notes is a significant step in the company's journey as an independent company, reflecting confidence among investors in Kyndryl's business model and growth prospects.
The information reported is based on a press release statement from Kyndryl.
InvestingPro Insights
Kyndryl Holdings, Inc. (NYSE:KD) has demonstrated strategic financial management with its recent debt issuance. The company's approach aligns with insights from InvestingPro, which show a mix of challenges and opportunities for the IT services giant.
InvestingPro Tips indicate that Kyndryl is considered a prominent player in the IT Services industry, which may provide a competitive edge in its market positioning. Additionally, analysts have revised their earnings upwards for the upcoming period, reflecting a positive outlook on the company's performance.
The real-time InvestingPro Data reveals a market capitalization of $4.93 billion, suggesting a significant presence in the market. However, the company is currently not profitable, with a negative P/E ratio of -4.72, and has faced a revenue decline of -4.33% over the last twelve months as of Q3 2024. Despite this, the company has seen a strong return over the last three months with a 17.35% price total return, indicating investor confidence in its future.
Kyndryl's efforts to optimize its capital structure are further underscored by the fact that it is trading at a low revenue valuation multiple, suggesting that the market may be undervaluing the company's revenue-generating potential. This could present an opportunity for investors seeking to capitalize on potential growth.
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