On February 24, 2025, FedEx Corp. (NYSE: FDX) released the final results of its exchange offers and consent solicitations for its senior notes. The offers, which expired on February 21, 2025, aimed to exchange any and all outstanding senior notes for new notes and to adopt proposed amendments to existing indentures. This strategic initiative is part of FedEx's larger plan to separate its FedEx Freight business into a new publicly traded company.

2. Details of the Exchange Offers

The Exchange Offers were initiated to facilitate the financial restructuring necessary for the upcoming Separation of FedEx Freight. Importantly, the completion of the Separation is not contingent upon the Exchange Offers or Consent Solicitations.

As of the expiration date, FedEx reported that an impressive total of approximately $10.7 billion in Existing USD Notes and €939.7 million in Existing Euro Notes had been validly tendered. The majority of these notes included:

3.400% Notes due 2028: $340.5 million (68.10%)

4.200% Notes due 2028: $237.3 million (59.32%)

3.100% Notes due 2029: $628.1 million (62.81%)

4.250% Notes due 2030: $406.1 million (54.15%)

2.400% Notes due 2031: $642.2 million (64.22%)

In total, the tendered amounts represented a significant percentage of each series, demonstrating strong investor engagement.

3. Consent Solicitation Results

FedEx also announced that the requisite consents had been received for the proposed amendments concerning the Majority Existing Notes. However, the company noted that it did not receive the necessary consents for the Non-Majority Existing Notes, which included the 1.300% Notes due 2031, where only €145.1 million (29.02%) was tendered.

4. Settlement and Consideration

The Exchange Offers and Consent Solicitation are set to be settled on February 26, 2025. For holders who participated early, the exchange consideration included $970 principal amount of the New USD Notes or €970 of the New Euro Notes, along with an early participation payment. The total consideration for early participants was thus $1,000 or €1,000 in total.

The terms for those who tendered after the early participation deadline were revised, with various amounts of cash incentives depending on the timing of their participation.

5. Proposed Amendments and Future Steps

The proposed amendments will lead to the automatic release of the guarantee of FedEx Freight, Inc. as it ceases to be a subsidiary of FedEx. This move is a strategic part of the company’s plan to streamline its operations and enhance financial flexibility post-Separation.

It is worth noting that while the amendments will be executed for the Majority Existing Notes, there will be no modifications for the Non-Majority Existing Notes.

6. Conclusion

FedEx's execution of the Exchange Offers and Consent Solicitation marks a significant step in its strategic restructuring. With a considerable amount of notes successfully tendered, the company is poised to move forward with its plans for the Separation, which promises to create new opportunities for both FedEx and its shareholders. The upcoming settlement date will be crucial for the completion of this initiative, as FedEx continues to navigate its transformation in the ever-evolving logistics landscape.

Original press release