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Huntsman (HUN) Announces Pricing of Senior Notes Worth $750M

Zacks Equity Research
General Electric (GE) closed at $10.27 in the latest trading session, marking a -0.96% move from the prior day.

Huntsman Corporation’s HUN fully-owned subsidiary — Huntsman International LLC — has priced its offering of $750 million in total principal amount of senior notes due 2029.

Per the company, the notes will be offered at 98.870% of the principal amount. Moreover, they will carry an interest rate of 4.5% per year. The offering is expected to close on Mar 13, 2019, subject to customary closing conditions.

Huntsman plans to redeem in full $650 million in total principal amount of its 4.875% senior notes due 2020 and pay associated costs and accrued interest using the net proceeds from the offering. The rest of the net proceeds are likely to be used for general corporate purposes. Additionally, the company may temporarily use a part of the net proceeds to repay amounts outstanding under its debt.

In fourth-quarter 2018, Huntsman reported adjusted earnings per share of 52 cents that missed the Zacks Consensus Estimate of 55 cents.

Nevertheless, revenues inched up around 1.5% year over year to $2,236 million, which beat the consensus mark of $2,123.2 million.

As of Dec 31, 2018, the company had $1,525 million of total cash and unused borrowing capacity. Long-term debt was $2,224 million, down 1.5% year over year.

Going forward, Huntsman will continue to globalize recent investments. The company will focus on higher growth markets and expand downstream businesses.

Moreover, it will continue to make significant investments to support core long-term growth. This includes building a new MDI splitter at Geismar, LA facility, to support differentiated downstream growth. Huntsman also intends to make additional bolt-on acquisitions as appropriate and maintain a balanced approach to buy back shares. Overall, it expects to generate strong free cash flow in 2019 and boost downstream businesses.

Zacks Rank & Key Picks

Huntsman currently carries a Zacks Rank #5 (Strong Sell).

A few better-ranked stocks in the basic materials space include Kirkland Lake Gold Ltd. KL, Ingevity Corporation NGVT and Materion Corporation MTRN, all currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kirkland has an expected earnings growth rate of 20.9% for 2019. The company’s shares have surged 125.1% in the past year.

Ingevity has an expected earnings growth rate of 17.9% for 2019. The company’s shares have surged 49.2% in a year’s time.

Materion has an expected earnings growth rate of 12.6% for 2019. Its shares have gained 13.5% in a year’s time.

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