Colfax (CFX) Declares Pricing Of Senior Notes Offering
Zacks Investment Research | Apr 13, 2017 08:43AM ET
Machinery company Colfax Corporation (NYSE:CFX) recently announced that it has priced its previously offered €350 million of principal amount of 3.25% senior notes due 2025. The company noted that the issuance will be guaranteed by some of its domestic subsidiaries.
Over the last one month, Colfax’s shares yielded 2.59% return, outperforming 1.71% gain recorded by the Zacks categorized Machinery General Industrial industry.
As disclosed, the senior notes have been offered only to qualified institutional buyers and certain persons outside the U.S., following the guidelines of Rule 144A and Regulation S under the Securities Act, respectively.
Colfax intends to use the net proceeds from the issuance to repay approximately $301.7 million borrowings under the revolving credit facility and bilateral credit agreements, and for general corporate purposes. The offering will likely be completed on Apr 19.
Though such debt issuances satisfy liquidity needs, we believe it makes the company more levered. Exiting 2016, Colfax had long-term debt of approximately $1.3 billion. If unchecked, higher debt levels will increase the company’s financial obligations and subsequently hurt its profitability.
The company is expected to release the first-quarter 2017 results on May 2. The Zacks Consensus Estimate for the stock is 29 cents for the first quarter, $1.65 for 2017 and $1.87 for 2018.
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