Capita (LSE:CPI) announced the issue of $55m of unsecured senior notes in the US Private Placement market, equivalent to £41m net of swaps.
The three-year notes carry an annual sterling coupon of 7.54%, with proceeds earmarked for refinancing existing debt and general corporate purposes.
Alongside the issuance, the outsourcing and business process services group amended the interest cover ratio covenant on its existing US Private Placement notes. The covenant now sits within a range of 3.0x to 3.5x, aligning it with Capita's recently announced revolving credit facility and the new notes.
The company said the changes bring consistency across its debt facilities and add flexibility as it continues its transformation programme.
Capita will provide further detail on the financing when it reports half-year results on 4 August.
News Intelligence what this means for the company
Capita raised $55m (£41m net) in three-year US private placement notes at 7.54% coupon, earmarked for debt refinancing and general corporate purposes. Alongside the issuance, the company loosened its interest cover ratio covenant to 3.0x–3.5x across all debt facilities, aligning terms and creating flexibility as it executes its transformation programme. The move comes after the group cut its 2026 profit outlook in July, citing Civil Service Pension Scheme failures that would reduce adjusted operating profit by £25m–£40m and free cash flow by £35m–£50m.
The financing shores up liquidity and refinances maturing debt, but the covenant relaxation—widening the acceptable interest cover range—signals Capita is managing tighter cash generation near-term. The 7.54% coupon reflects elevated refinancing costs in the current rate environment and the company's operational headwinds; full detail on the financing rationale and debt maturity profile will emerge at the 4 August results.
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