Texas Instruments Announces Pricing Of Senior Notes Due 2025
Zacks Investment Research | Mar 03, 2020 09:01PM ET
Texas Instruments Incorporated (NASDAQ:TXN) or TI recently announced an offering of senior unsecured notes aggregating $750 million. The notes carry an interest rate of 1.375% and are scheduled to mature on Mar 12, 2025.
The company stated that the transaction proceeds will be used for general corporate purposes. In addition, TI will use the proceeds to repay $500 million principal amount of 1.75% notes due May 1, 2020.
BofA Securities, MUFG Securities Americas Inc., Barclays (LON:BARC) Capital, Citigroup (NYSE:C) Global Markets, J.P. Morgan Securities LLC, Mizuho Securities USA LLC, and Morgan Stanley & Co (NYSE:MS). LLC are acting as joint book-running managers for the purpose.
Cash Position
At the end of fourth-quarter 2019, cash and short-term investments balance came in at $5.4 billion, which increased from $5.1 billion as of Sep 30, 2019. Long-term debt was $5.303 billion, up from $5.302 billion in the prior quarter.
The company generated $1.8 billion of cash from operations, down from $1.9 billion in the previous quarter. Capex was $163 million in the fourth quarter. Further, free cash flow came in at $1.6 billion. Texas Instruments paid out dividends worth $841 million during the reported quarter. Further, it repurchased shares worth $489 million.
We believe that the company has a strong balance sheet, which will help it to capitalize on investment opportunities and pursue strategic acquisitions, further improving prospects. In our view, the senior notes’ offering will bring down the company’s cost of capital, in turn strengthening the balance sheet and supporting growth.
These notes should provide financial flexibility and propel long-term growth.
Texas Instruments Incorporated Price and Consensus
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