Welcome to the latest update on CPI Card Group Inc. (NASDAQ: PMTS), a leading payments technology company based in Littleton, Colo. Recently, CPI Card Group announced a private offering of senior secured notes totaling $285 million, with the maturity date set for 2029. The completion of this offering is subject to market conditions, and there is no guarantee of its finalization or the terms if it does proceed.
The notes will be issued by CPI Card Group’s wholly-owned subsidiary, CPI CG Inc., as general senior secured obligations. They will be guaranteed by CPI Card Group and its domestic subsidiaries, excluding the issuer. The assets of both the issuer and the guarantors will act as security for these notes, with certain exceptions.
The net proceeds from the sale of these notes, along with available cash, will be utilized by CPI Card Group to redeem all of its outstanding 8.625% senior secured notes due in 2026. This will also cover associated fees, premiums, and expenses.
The offering targets qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, or certain non-U.S. persons under Regulation S. The securities have not been registered under the Securities Act or any state securities laws and cannot be offered or sold within the United States without registration or exemption.
CPI Card Group’s recent financial report showed a 7% decrease in net sales for the first quarter of 2024. Despite this, the company saw growth in net income and adjusted EBITDA, driven by expansion in prepaid business and card services.
Roth/MKM has maintained a Buy rating on CPI Card Group, expressing optimism about the company’s future prospects. The firm predicts increased customer purchasing patterns once the current card inventory issue is resolved in 2024.
Furthermore, CPI Card Group is venturing into digital solutions with a new contract promising higher sales through 2029. The company holds a cash reserve of $17.1 million and has not utilized its $75 million ABL revolver, indicating financial stability.
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CPI Card Group Inc.’s recent announcement about the private offering of senior secured notes highlights its financial health and market performance. With a market capitalization of $288.07 million and a P/E ratio of 16.43, the company’s position in the payments technology sector is significant. Investors can access more insights and tips on CPI Card Group by visiting the InvestingPro website.
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