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ArcelorMittal (MT) Announces Issuance of Fixed Rate Notes

Zacks Equity Research

ArcelorMittal MT has declared the issue of €750 million 2.25% fixed rate notes due 2024. Per the company’s statement, the issuance was closed on Jan 17, 2019.

The notes were issued under the company’s €10-billion wholesale Euro Medium Term Notes (EMTN) program. The company will use the proceeds of the issuance for general corporate purposes.

The company, in December 2018, also inked a $5.5 billion revolving credit facility with a five-year maturity along with the options for two one-year extensions. The move replaces the existing $5.5 billion revolving credit facility agreement inked on Apr 30, 2015 and amended on Dec 21, 2016.

Per the company, the facility will be used for the general corporate purposes of the group. Through this facility, ArcelorMittal is able to extend the average maturity date by roughly three years. It also provides the company significantly improved terms over the former facility.

The company’s shares have lost 25.8% in the past six months compared with 20.4% decline of the industry.

In November 2018, ArcelorMittal stated that market conditions are favorable and demand environment is positive along with healthy steel spreads. ArcelorMittal anticipates global apparent steel consumption (ASC) growth in the range of 2-3% for 2018, which is unchanged from the previous expectation.

In the United States, the company projects ASC growth of 2-3%, unchanged from prior projections. Demand in construction and machinery is likely to drive growth in ASC. The company continues to anticipate ASC growth in Europe in the range of 2-3%, supported by strength across construction and machinery end-use markets.

Per the company, ASC is expected to rise 5.5-6.5% in Brazil, in line with the previous expectation. ASC growth in China is expected to be 1-2% (unchanged from prior forecast), driven by consistent improvement in real estate demand, ongoing strong machinery and automotive demand, while being partly offset by slowdown in infrastructure.

ArcelorMittal Price and Consensus


ArcelorMittal Price and Consensus | ArcelorMittal Quote

Zacks Rank & Key Picks

ArcelorMittal currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the basic materials space are Ingevity Corporation NGVT, Cameco Corporation CCJ and Israel Chemicals Ltd. ICL. While Ingevity sports a Zacks Rank #1 (Strong Buy), Cameco and Israel Chemicals carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ingevity has an expected earnings growth rate of 21.5% for 2019. The company’s shares have gained 15.5% in the past year.

Cameco has an expected earnings growth rate of 20% for 2019. Its shares have rallied 27.7% in a year’s time.

Israel Chemicals has an expected earnings growth rate of 5.4% for 2019. Its shares have rallied 32% in a year’s time.

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