Celanese Corporation’s CE subsidiary — Celanese US Holdings LLC — recently wrapped up the registered offering of $500 million of U.S. dollar-denominated senior notes due in 2024. Also, it has entered into a cross-currency swap arrangement to effectively convert the notes into a euro-denominated borrowing.
Per the company, net borrowing rate will be 1.03%, which comprises the 3.52% yield on the notes and excludes the currency swap impact. The proceeds will be used to refinance existing shorter-term euro-denominated debt. Moreover, the notes are guaranteed on a senior unsecured basis.
The deal also extends the company’s debt maturity profile and reduces interest expenses. The consistent improvement in business performance indicates an improved credit profile and rating. This enables the company to extend debt maturities at lower borrowing costs.
Celanese’s shares have lost 22% in the past year, against the industry’s 2.2% rise.
Celanese’s adjusted earnings were $2.62 a share in first-quarter 2019, down 6.1% year over year. The figure topped the Zacks Consensus Estimate of $2.49.
The company backed its adjusted earnings per share guidance of roughly $10.50 for 2019, considering that underlying fundamentals will start to improve later this year.
The company does not expect significant improvement in demand in the second quarter. It expects the quarterly results to be in line with first-quarter levels. Celanese will continue to invest in its businesses as well as expand its capability to boost growth and value for shareholders.
Zacks Rank & Key Picks
Celanese currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Materion Corporation MTRN, Fortescue Metals Group Ltd. FSUGY and AngloGold Ashanti Limited AU, all currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Materion has an expected earnings growth rate of 16.4% for 2019. The company’s shares have gained 19.7% in the past year.
Fortescue Metals has an expected earnings growth rate of 101.5% for the current year. The company’s shares have surged 51.9% in a year’s time.
AngloGold has an expected earnings growth rate of 86.8% for 2019. Its shares have rallied 36% in a year’s time.
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