Science Applications International closes $500 million senior notes offering

Science Applications International Corporation (SAIC) concluded a $500 million private offering of 6.750% senior notes due 2034 on Friday. The company received approximately $493 million in net proceeds after accounting for discounts and estimated fees. This financing brings SAIC's total debt to around $2.7 billion, with a debt-to-equity ratio of 1.88.

However, SAIC maintains a solid current ratio of 1.2 and a high Altman Z-Score of 7.47, demonstrating strong financial stability. Analysts suggest that SAIC is currently undervalued, making it one of the top undervalued stocks on their platform. The company used the net proceeds to redeem all outstanding 4.875% senior notes due 2028 and cover offering-related expenses.

Any leftover funds will be allocated to general corporate uses. The new senior unsecured notes are guaranteed by SAIC's domestic subsidiaries, subject to certain restrictions. The offering was made to qualified institutional buyers under Rule 144A and to select non-U.S. investors under Regulation S. The notes are redeemable at any time before December 1, 2029, at 100% of the principal amount plus accrued interest and a make-whole premium.

After that date, redemption will occur at specified prices along with accrued interest. Up to 40% of the original principal can be redeemed in equity offerings at a 106.750% redemption price, if redeemed by December 1, 2029. In the event of a change of control, the company may offer to repurchase the notes for 101% of the principal amount, including accrued interest.

These notes and related guarantees were not registered under the Securities Act or state securities laws.