Corning Inc. (GLW) has recently announced the pricing of senior unsecured notes aggregating $250 million. These bonds carry a coupon rate of 3.70% and are due to mature in 2023. The offering is expected to close on Nov 18, subject to customary closing conditions.
Corning stated that the net proceeds would be used for general corporate purposes.
J.P. Morgan Securities LLC and Deutsche Bank Securities Inc. will be acting as joint book-running managers and under-writers for the offering.
Corning is a leading manufacturer of specialty glass and ceramics. In the recently concluded third quarter, the company spent $146 million on cash dividends and used $209 million to repurchase its common stock.
At quarter-end, the company had cash and short-term investments balance of $5.45 billion. Including long-term liabilities and short-term debt, the net cash position was just $85 million at the end of the quarter, up $24 million during the quarter. Currently, the company’s debt-to-total capitalization ratio is only 11.5%, which will increase after the issuance of these notes.
We believe that Corning has a strong balance sheet, which will help the company to capitalize on investment opportunities and make strategic acquisitions, further improving its growth prospects. We believe the senior notes offering will bring down its cost of capital, thus strengthening the company’s balance sheet and supporting its future growth.
Currently, Corning has a Zacks Rank #3 (Hold). Other stocks that are performing well at current levels include Melco Crown Entertainment Limited (MPEL), Best Buy Inc. (BBY) and Northern Oil And Gas Inc. (NOG). All these stocks carry a Zacks Rank #1 (Strong Buy).