FedEx Corp. announced the commencement of offers to exchange its outstanding senior notes for new notes, alongside soliciting consents to amend the indentures governing these notes. This financial maneuver is directly linked to the previously announced full separation of its FedEx Freight business into a new publicly traded company.
The primary objective of these exchange offers and consent solicitations is to optimize the respective capital structures of FedEx and the future independent FedEx Freight after the separation. The separation itself is anticipated to be tax-free for U.S. federal income tax purposes for FedEx stockholders and is expected to be executed within the next 18 months.
FedEx does not intend to increase its leverage in connection with the separation, emphasizing a disciplined approach to financial management. The exchange offers and consent solicitations are crucial steps in preparing the company's balance sheet for the strategic divestiture, ensuring both entities are well-positioned for future growth and capital allocation.
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