We advised Bread Financial on its new credit facilities, its issuance of convertible notes and a tender offer

Davis Polk advised Bread Financial Holdings, Inc. on its entrance into a new credit agreement, pursuant to which the lenders have agreed to provide a new $700 million three-year senior unsecured revolving credit facility and a new $575 million three-year senior unsecured delayed draw term loan facility. We also advised the company on a Rule 144A offering of $316.25 million aggregate principal amount of its 4.25% convertible senior notes due 2028 (which included $41.25 million aggregate principal amount of notes pursuant to the exercise in full of the initial purchasers’ option to purchase additional notes) and related capped call transactions.

The convertible senior notes were issued June 13, 2023. The new credit agreement was signed on June 7, 2023, and became effective upon the closing of the convertible senior notes transaction. Bread Financial used the net proceeds from the convertible notes offering to fund the cost of entering into the capped call transaction and, together with available cash on hand, to repay all outstanding loans and terminate all other obligations under its existing amended and restated credit agreement. The new revolving credit facility is available for general corporate purposes and the new delayed draw term loan facility is available for refinancing existing indebtedness.

Davis Polk is also advising Bread Financial on its concurrent tender offer to purchase any and all of its outstanding 4.750% senior notes due 2024. Bread Financial intends to use borrowings under the new term loan facility, and/or cash on hand, to fund the purchase of all the 4.750% senior notes due 2024 accepted in the tender offer. Upon the expiration on June 14, 2023, approximately $564.7 million aggregate principal amount of such notes had been tendered, with an additional $1.8 million subject to guaranteed delivery. The tender offer will settle on June 20, 2023.

Bread Financial is a tech-forward financial services company providing simple, personalized payment, lending and saving solutions. Bread Financial creates opportunities for its customers and partners through digitally enabled choices that offer ease, empowerment, financial flexibility and exceptional customer experiences. Driven by a digital-first approach, data insights and white-label technology, Bread Financial delivers growth for its partners through a comprehensive product suite, including private label and co-brand credit cards, installment lending and buy now, pay later (BNPL). Bread Financial also offers direct-to-consumer solutions that give customers more access, choice and freedom through its branded Bread Cashback American Express Credit Card and Bread Savings products.

Headquartered in Columbus, Ohio, Bread Financial is powered by its 7,500+ global associates and is committed to sustainable business practices.

The Davis Polk corporate team included partner John B. Meade and associate Meaghan Kennedy. The equity derivatives team included partner Caitlin L. Wood, counsel Faisal Baloch and associates Lindsey B. Meyers-Perez, Jonathan Schlecht and Ray Roesler. The finance team included partner Scott M. Herrig and associates Kendra L. Sandidge and Yasmine Sentissi. All members of the Davis Polk team are based in the New York office.

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