Nasdaq Issues Notes Worth $500M To Fund EVestment Buyout
Zacks Investment Research | Sep 20, 2017 01:31AM ET
Nasdaq, Inc. (NASDAQ:NDAQ) announced that it will issue $500 million of senior notes due 2019. The offering is anticipated to close by Sep 22, 2017. The interest has been pegged at three-month U.S. dollar LIBOR plus 0.4% per annum.
The company intends to utilize the net proceeds along with cash in hand and borrowings under the company’s senior credit facility or through issuances of commercial paper to finance its eVestment buyout as well as the expenses associated with it. Nasdaq will also utilize the funds for general corporate purposes if the eVestment acquisition does not materialize. On Sep 5, 2017 Nasdaq had announced that it will acquire eVestment for $705 million. The buyout is expected to culminate in the fourth quarter of 2017.
The approach by Nasdaq to capitalize on the still-low interest rate environment to procure funds appears prudent. Also, this might lower the interest burden on borrowings, facilitating margin expansion.
The company exited the last-reported quarter with its debt balance declining 15% from the 2016-end level. Long-term debt to equity ratio was 0.55 at quarter end, down 1100 basis points. With the new issuance, the long-term debt-to-equity ratio would increase 900 basis points.
With the issuance, the company’s interest burden will increase. However, solid operational performance will help it service debt uninterruptedly. The company has delivered positive surprise in the last three quarters. Notably, the company is focused to de-leverage over the next four quarters with effective capital deployment that in turn will strengthen its balance sheet.
Zacks Rank and Share Price Movement
Nasdaq carries a Zacks Rank #3 (Hold). Shares of the company have underperformed the industry in a year’s time. While Nasdaq’s shares have rallied 9.6%, the industry has registered a gain of 18%. Diversified product offerings and strategic acquisitions should continue to drive the shares higher.
Stocks to Consider
Better-ranked stocks from the finance sector are Atlas Financial Holdings, Inc (AFH), Markel Corporation (MKL) and Mercury General Corporation (MCY), each sporting a Zacks Rank #1 (Strong Buy). You can see .
Atlas Financial Holdings engages in underwriting commercial automobile insurance policies in the United States. The company delivered positive surprises two out of the last four quarters, with an average beat of 57.94%
Get The News You Want
Markel Corporation markets and underwrites specialty insurance products in the United States and internationally. The company delivered positive surprises two out of the last four quarters, with an average beat of 21.06%
Mercury General Corporation engages in writing personal automobile insurance in the United States. The company delivered positive surprises in three of the last four quarters, with an average beat of 1.06%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple (NASDAQ:AAPL) sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.