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Rockwood Repays Debt

Zacks Equity Research

Rockwood Holdings Inc. (ROC) recently announced that it has repaid all its outstanding term loans under its senior secured credit agreement using cash on hand.

The total principal amount of the debt repaid was $893.5 million, comprising of $306.25 million of Term Loan A and $587.25 million of Term Loan B. The rate of interest on the Term Loan A was Libor plus 2.25%, and on Term Loan B was Libor plus 2.75%.  With this repayment, Rockwood has reduced its principal debt by over $1.43 billion.

Rockwood repaid $30.6 million loans related to its senior secured facility and $507 million loan related to its Sachtleben secured facility. The company, in March 2013, repaid all the debt outstanding under the secured facility of its wholly-owned subsidiary, Sachtleben GmbH, its titanium dioxide (TiO2) pigments business.

This advanced its progress towards two of its stated goals for 2013. The first goal being commitment to de-leverage and the second, to facilitate the divestiture process for Sachtleben.

Rockwood remains focused on optimizing free cash flows and implementing appropriate capital allocation strategies through dividends and share repurchases and reinvestment in key businesses in 2013.
Recently, Rockwood announced a 12.5% hike in its quarterly cash dividend to 45 cents per share from 40 cents per share. The dividend will be paid on Sep 26, 2013, to shareholders of record at the close of business on Sep 11, 2013.

Rockwood currently holds a Zacks Rank #5 (Strong Sell).

Other companies in the specialty chemical space with favorable Zacks Rank are Ferro Corp. (FOE), Minerals Technologies Inc. (MTX) and Sensient Technologies Corp. (SXT). While Ferro retains a Zacks Rank #1 (Strong Buy), Minerals Technologies and Sensient Technologies retain a Zacks Rank #2 (Buy).

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