Advertisement
U.S. markets closed
  • S&P 500

    5,123.41
    -75.65 (-1.46%)
     
  • Dow 30

    37,983.24
    -475.84 (-1.24%)
     
  • Nasdaq

    16,175.09
    -267.10 (-1.62%)
     
  • Russell 2000

    2,003.17
    -39.43 (-1.93%)
     
  • Crude Oil

    85.45
    +0.43 (+0.51%)
     
  • Gold

    2,360.20
    -12.50 (-0.53%)
     
  • Silver

    27.97
    -0.28 (-0.99%)
     
  • EUR/USD

    1.0646
    -0.0085 (-0.79%)
     
  • 10-Yr Bond

    4.4990
    -0.0770 (-1.68%)
     
  • dólar/libra

    1.2451
    -0.0104 (-0.83%)
     
  • USD/JPY

    153.2400
    +0.0370 (+0.02%)
     
  • Bitcoin USD

    64,409.91
    -3,153.64 (-4.67%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,995.58
    +71.78 (+0.91%)
     
  • Nikkei 225

    39,523.55
    +80.92 (+0.21%)
     

Element Solutions (ESI) Wraps Up $1.15B Term Loan Syndication

Element Solutions Inc ESI has announced the completion of the syndication of a seven-year secured term loan credit facility totaling $1.15 billion under its credit agreement.

Element Solutions prepaid its current $1,105 million term loan B-1 tranche and $150 million term loan A using the proceeds of the new $1,150 million term loan B-2 facility and cash on hand.

The new term loan B-2 tranche, with its applicable interest rate of SOFR plus a spread of 2.00% annually, has almost the exact same terms as the previous term loan B-1 tranche, with the exception of its maturity date.

ESI monetized existing interest rates and cross-currency swap arrangements originally set for maturity in 2024 and 2026 in connection with the funding of the new term loan B-2 tranche.

It then entered into new interest rate and cross-currency swap agreements, thereby converting $760 million of the term loan B-2 tranche, which was denominated in U.S. dollars, into fixed-rate euro-denominated debt at a fixed EUR all-in rate of 4.31%. These new swaps will mature in 2028. The remaining $390 million is subject to existing swaps that are slated to mature in 2025.

The company is extending the maturities of a large portion of its secured debt to 2030 and lowering gross debt by more than $100 million through this transaction — all without raising margin. With the new swaps in place, the company now has around 80% of its capital structure set until 2028, effectively minimizing interest rate risk in the current higher rate environment.

Shares of Element Solutions have gained 21.1% over the past year compared with 16.4% rise of its industry.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

ESI, on its third quarter call, revised its adjusted EBITDA guidance to nearly $485 million for 2023.

It estimates full-year 2023 adjusted earnings per share of around $1.30. ESI anticipates generating a free cash flow of about $265 million for 2023.

Element Solutions Inc. Price and Consensus

Element Solutions Inc. price-consensus-chart | Element Solutions Inc. Quote

Zacks Rank & Key Picks

Element Solutions currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks in the basic materials space include Denison Mines Corp. DNN, Axalta Coating Systems Ltd. AXTA and Hawkins, Inc. HWKN.

Denison Mines has a projected earnings growth rate of 100% for the current year. It currently carries a Zacks Rank #1 (Strong Buy).  DNN delivered a trailing four-quarter earnings surprise of roughly 225%, on average. The stock is up around 60% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Axalta has a projected earnings growth rate of 5.4% for the current year. It currently carries a Zacks Rank #1.  AXTA delivered a trailing four-quarter earnings surprise of roughly 6.7%, on average. The stock is up around 35.3% in a year.

Hawkins has a projected earnings growth rate of 21% for the current year. It currently carries a Zacks Rank #2 (Buy).  Hawkins delivered a trailing four-quarter earnings surprise of roughly 27.5%, on average. HWKN shares are up around 84.7% in a year.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Element Solutions Inc. (ESI) : Free Stock Analysis Report

Denison Mine Corp (DNN) : Free Stock Analysis Report

Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report

Hawkins, Inc. (HWKN) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

Advertisement