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Lamb Weston to issue new notes

photo of french fries as a background graphic. Caption:"Lamb Weston, headquartered in Eagle, produces a wide variety of frozen potato products."

Lamb Weston, headquartered in Eagle, produces a wide variety of frozen potato products. Photo courtesy of Lamb Weston

Taking advantage of lower interest rates continues to be popular with Idaho firms and local governments and taxing districts. This time around, it is the french fry giant Lamb Weston jumping on the opportunity to reissue some of its debt at a better rate.

The firm announced on Oct. 19 that it would issue a new set of senior notes for $970 million at 4.125% due 2030 and $700 million at 4.375% due 2032 in a private offering that is exempt from the registration requirements of the amended Securities Act of 1933.

This announcement was a revision of a previous announcement made earlier on Oct. 19. The revised announcement increased the aggregate principal amount of the offering of 2030 notes and decreased the aggregate principal amount of the 2032 notes. The notes will be guaranteed by the company’s material domestic subsidiaries. The closing of the offering of the notes is expected to occur on or around Nov. 8.

The company intends to use the net proceeds of the issuance of the notes, together with available cash, to redeem all of its outstanding 4.625% senior notes due 2024 and 4.875% senior notes due 2026.

Lamb Weston’s first quarter 2022 earning statement, issued Oct. 7, stated that the firm had mostly recovered from the COVID-19 downturn, reflecting an improvement from Q4 2021 when its revenues were still somewhat mashed compared to pre-pandemic levels. Despite this, Lamb Weston cautioned that rising costs would impact the 2022 bottom line.

“Our first quarter sales results reflect the ongoing broad recovery within the frozen potato category, with overall demand in North America near pre-pandemic levels, and our shipments improving in each of our core restaurant and food service sales channels,” said Tom Werner, president and CEO, in a statement. “However, the impact of extreme summer heat that negatively affected potato crops in the Pacific Northwest, combined with industry-wide operational challenges, including highly inflationary input and transportation costs, labor availability and upstream and downstream supply chain disruptions, will result in higher costs as the year progresses, and significantly pressure our earnings. Accordingly, we expect our gross profit margins to remain below pre-pandemic levels through fiscal 2022.”

Lamb Weston is still well in the black. On Sept. 23, the company announced a quarterly dividend of $0.235 per share of Lamb Weston common stock.

Lamb Weston Holdings Inc. is headquartered in Eagle. The firm has the no. 1 market share for frozen potato products in the United States and the no. 2 market share internationally. The firm is a publicly traded company on the New York Stock Exchange with the ticker symbol of LW.

About Catie Clark