Flavors and fragrances major, International Flavors & Fragrances Inc. (IFF) is all set to raise funds through debt issuance and recently priced $300 million worth of Senior Notes.
Public offer price of the notes have been fixed at 99.912% of principal amount plus any accrued interest (if any). These debt instruments are due to mature on May 1, 2023 and carry a 3.21% yield to maturity. Coupon rate is 3.20% with interest payment due twice a year on May 1 and Nov 1. The first interest installment falls due on Nov 1, 2013.
The offering will consummate on Apr 4, 2013. The notes offered have been awarded Baa1 (stable) rating from Moody’s and BBB (positive) from S&P.
International Flavors & Fragrances is likely to fetch approximately $297 million as net proceeds, after underwriting discounts and other estimate expenses. The company intends to use the proceeds for general corporate purposes.
Exiting the fourth quarter 2012, International Flavors & Fragrances had a long-term debt balance of $881.1 million, which comprised 82.2% of senior notes. The funds raised were primarily utilized to enhance the company’s product portfolio and product mix.
Over the long term, International Flavors & Fragrances hopes to achieve around 4%-6% expansion in local currency sales, about 7%-9% operating profit growth and over 10% earnings per share growth.
The current Zacks Consensus Estimate for the first quarter of 2013 is $1.12, representing a year-over-year increase of 11.8%. Estimates for years 2013 and 2014 are $4.38 and $4.78, reflecting annual growth of 10.0% and 9.2%, respectively.
International Flavors & Fragrances currently has a Zacks Rank #3 (Hold). Other stocks to watch out for in the industry are Avon Products Inc. (AVP) and Inter Parfums Inc. (IPAR), each holding a Zacks Rank #1 (Strong Buy) while Nu Skin Enterprises Inc. (NUS) has a Zacks Rank #2 (Buy).
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