Illinois Raises $1.1B via Notes - Analyst Blog
23 Agosto 2012 - 1:00PM
Zacks
Industrial tool maker,
Illinois Tool Works Inc. (ITW) recently opted for
raising funds from the market through issuance of $1.1 billion
principal amount of Senior Unsecured Notes due to mature on
September 1, 2042. The notes, expected to yield 3.995% at maturity,
were offered at 99.038% of the principal amount.
The notes carry a coupon rate of
3.9% to be paid semi-annually by the company with the first
installment accruing on March 1, 2013. The notes carry an A1 rating
from Moody’s and A-PLUS from S&P.
Illinois Tool Works estimates
collection of approximately $1.078 billion, net of underwriting
expenses and other issue expenses from the notes offering, and
intends to repay its near-term maturing debts and meet its general
corporate purposes by using the amount. As of six months ended June
30, 2012, the company had earnings to fixed charges ratio of 11.8x
as against 11.3x ending year 2011. Exiting the second quarter 2012,
Illinois Tool Works had a cash and cash equivalents balance of
$1,692.0 million and long-term debt balance, net of current
portion, of $3,468.0 million.
This announcement succeeds the
company’s announcement of a 51% stake divestment in its Decorative
Surfaces division to a fund managed by Clayton, Dubilier &
Rice, LLC (CD&R) for approximately $1.09 billion in cash.
In the second quarter 2012,
Illinois Tool Works reported an EPS from continuing operations of
$1.11, up 16% year over year. Operating revenue grew marginally by
0.87% to $4,655 million, lower than management’s projected growth
range of 3.5%-6.0%. For the third quarter 2012, management
anticipates that earnings per share would be within the $1.03-$1.11
range.
The Zacks Consensus Estimate for
the third quarter 2012 stand at $1.06, up 6.2% year over year.
Estimates for 2012 and 2013 are at $4.12 and $4.51, representing
year-over-year growth of 0.94% and 9.57%, respectively.
Illinois Tool Works is one of the
leading manufacturers of industrial products and equipment
operating through 800 business units in 57 countries. It competes
with companies like Cooper Industries plc. (CBE),
General Electric Co. (GE), and Manitowoc
Co. Inc. (MTW).
We currently maintain a Neutral
recommendation on Illinois Tools. The stock also bears a Zacks #4
Rank, implying a short-term Sell rating.
COOPER INDS PLC (CBE): Free Stock Analysis Report
GENL ELECTRIC (GE): Free Stock Analysis Report
ILL TOOL WORKS (ITW): Free Stock Analysis Report
MANITOWOC INC (MTW): Free Stock Analysis Report
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