Pershing Square Holdings, Ltd. Announces Issuance of a Private Placement of $200,000,000 of 3.00% 12-Year Unsecured Bonds

Pershing Square Holdings, Ltd. (LN:PSH) (LN:PSHD) (NA:PSH) (“PSH”) today announced the issuance of a private placement of $200,000,000 of 12-year bonds with a coupon rate of 3.00%, maturing on July 15, 2032 (the “2032 Bonds”). The 2032 Bonds are callable two years prior to their maturity at par with no penalty.

The 2032 Bonds will be unsecured, and will rank equally in right of payment with PSH’s $1,000,000,000 of 5.500% Bonds due July 15, 2022 (the “2022 Bonds”), and PSH’s $400,000,000 of 4.950% Bonds due July 15, 2039 (the “2039 Bonds,” and together with the 2022 Bonds, the “Existing Bonds”). The 2032 Bonds will contain the same covenants as those governing the 2039 Bonds.

Since the issuance of the 2039 Bonds last July, PSH’s Total Indebtedness to Total Capital Ratio (“TITCR”), a measure of total debt to total assets, has declined from 19.9% to 15.4% due to strong investment performance. Pro forma for the new issuance, PSH’s TITCR will increase to 17.2%.

“As PSH’s NAV increased substantially this year and PSH’s debt ratio declined, the Board decided to take advantage of the low interest rate environment and issue the 2032 Bonds as part of our long-term debt management strategy,” said PSH Chairman Anne Farlow. “The Board believes that PSH’s ability to issue low-cost, investment-grade, long-term debt is an important competitive advantage for PSH, and in the long-term best interest of PSH shareholders.”

PSH expects to manage its TITCR over time by increasing NAV through strong performance, and/or the refinancing/repayment of the 2022 Bonds. As the $1 billion of 2022 Bonds are due in less than two years (July 15, 2022), the issuance of the 2032 Bonds allows PSH to further ladder its maturities as part of PSH’s long-term debt management program.

The issuance of the 2032 Bonds is not expected to have any impact on PSH’s current share repurchase program or any future extensions or expansions of the program. The issuance of the 2032 Bonds does not increase the management or incentive fees paid to the Investment Manager, as the fees paid are determined based on Net Asset Value, not the total assets of PSH.

The 2032 Bonds will be issued to institutional accounts managed by Guggenheim Partners Investment Management, LLC.

Use of Proceeds
Bond proceeds will be available for new investments and general corporate purposes.

Call Provisions
The 2032 Bonds are callable at any time at par plus a Make Whole Premium determined by discounting their scheduled interest and principal payments at the comparable Treasury yield to maturity plus 50 basis points, up until July 15, 2030, the Par Call Date, when the 2032 Bonds will become callable at their par value.