Bread Financial Holdings Inc. Announces $400 Million Subordinated Notes Offering

On March 5, 2025, Bread Financial Holdings, Inc. (NYSE: BFH) made a significant announcement regarding its financial strategy with the pricing of a private offering of $400 million in aggregate principal amount of its 8.375% fixed-rate reset subordinated notes, set to mature in 2035. This offering is part of the company’s ongoing efforts to strengthen its capital structure and support its subsidiary operations, particularly through lending.

The subordinated notes, referred to as the "Notes," will be sold at a price of 100% of their principal amount, and the closing of this issuance is anticipated to occur on March 10, 2025, subject to customary closing conditions. The company expects to receive approximately $395 million in net proceeds from this transaction after accounting for initial purchasers’ discounts and before estimated offering expenses.

Bread Financial plans to strategically allocate no less than $250 million of the net proceeds from this offering as subordinated debt to its subsidiary, Comenity Capital Bank. The remainder of the proceeds will be directed towards general corporate purposes, which may include share repurchases. This move underscores the company's commitment to maintaining a robust capital base while also enhancing shareholder value.

It is essential to note that the Notes will not be registered under the Securities Act of 1933 or any state securities laws. Consequently, they may only be offered or sold to individuals who are classified as “qualified institutional buyers” under Rule 144A of the Securities Act or to non-U.S. persons in compliance with Regulation S. This regulatory framework ensures that the offering remains compliant while targeting a specific class of investors.

Bread Financial is positioned as a tech-forward financial services company that provides personalized payment, lending, and saving solutions to millions of consumers across the United States. The company’s offerings include general-purpose credit cards and savings products that cater to diverse consumer needs. Additionally, it partners with well-known brands across various sectors such as travel, health, and beauty, enhancing their growth through private label and co-brand credit card programs.

The release includes forward-looking statements regarding the company’s expectations and forecasts for future performance. While Bread Financial is optimistic about its plans, it acknowledges the inherent risks and uncertainties in the market that could impact actual outcomes. These factors include macroeconomic conditions, regulatory changes, and the performance of its brand partners, among others.

Bread Financial's recent announcement about its subordinated notes offering reflects a proactive approach to bolster its financial position and support its subsidiary banking operations. By leveraging this opportunity, the company not only aims to enhance its capital structure but also to create value for its shareholders in a competitive financial landscape. As the company prepares for the closing of this offering, stakeholders will be keenly watching how these funds will be utilized to drive growth and innovation in the coming years.