P. H. Glatfelter (GLT) has priced its $250 million of senior notes offering due 2020. The notes bear an interest of 5.375% per annum. The offering is expected to close on October 3.
Glatfelter intends to use the net proceeds from the offering to finance its previously announced cash tender offer of its outstanding senior notes (due 2016) bearing an interest of 71/8%, to retire any notes not purchased in such tender offer through at least one redemptions, any consequent tender offers or open market purchases as well as repay amounts outstanding under its credit facility and for general corporate purposes.
Glatfelter had announced to issue $200 million of senior notes few days back. Thus, this new offering increased the senior notes offering by $50 million.
Glatfelter reported second-quarter 2012 adjusted earnings of 12 cents per share, beating the Zacks Consensus Estimate of 5 cents and exceeding the year-ago quarter earnings of 7 cents. Revenues decreased 3.4% year over year to $386 million, missing the Zacks Consensus Estimate of $399 million.
Glatfelter had cash and cash equivalents of $23.4 million as of June 30, 2012, compared with $38.3 million as of December 31, 2011. The company had $218 million in debt as of June 30, 2012, lower than $227 million as of December, 31, 2011.
The debt-to-capital ratio was 29.7% as of June 30, 2012, lower than 31.6% as of December 31, 2011. In the stringent regulatory background, the offering of the senior notes is expected to further strengthen the company’s balance sheet as well as support its future growth.
Pennsylvania-based Glatfelter is a global manufacturer of specialty papers and fiber-based engineered materials. It has operations in the U.S. and also in international regions including facilities in Canada, Germany, France, the UK and the Philippines, a representative office in China and a sales and distribution office in Russia.
Glatfelter has made significant progress in diversifying its businesses, achieve growth in targeted areas and cultivate new revenue streams. However, the company faces tough competition from leading companies like International Paper (IP) and Domtar Corp. (UFS).
Glatfelter currently retains a short-term Zacks #2 Rank (Buy). We have a long-term Neutral recommendation on the stock.
More From Zacks.com