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Valmont (VMI) Declares Redemption of Senior Notes Due 2020

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Valmont Industries, Inc. VMI will redeem all $250.2 million of its outstanding 6.625% senior notes due Apr 20, 2020 on Jul 9, 2018. It will finance the redemption with a mix of available cash and net proceeds from an issuance of $55 million total principal amount of its 5.25% senior notes due 2054 and $200 million total principal amount of its 5% senior notes due 2044.

Notably, the offering of the 2054 and 2044 notes was completed on Jun 8, 2018. Subject to customary closing conditions, the company expects the offering to close on Jun 19, 2018.

Per the company, the 2020 notes will be redeemed at a price that is greater of the sum of the present values of the remaining payments of principal and interest on the notes from the redemption date to the maturity date or 100% of the principal amount of the notes to be redeemed. Moreover, redemption price for the 2020 notes will be calculated in accordance with the terms of the notes on the third business day, preceding the redemption date.  

Notably, Valmont ended first-quarter 2018 with cash balance of $479.7 million, up roughly 12.8% year over year. Long-term debt at the end of the quarter was $753.6 million, down around 0.1% from the year-ago quarter.

The stock has gained 3.6% over the past three months, outperforming the industry’s 2.2% rise.

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks worth considering in the basic materials space are FMC Corporation FMC, Westlake Chemical Corporation WLK and Celanese Corporation CE, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

FMC Corp has an expected long-term earnings growth rate of 14.3%. Its shares have moved up 15.8% in a year.

Westlake Chemical has an expected long-term earnings growth rate of 12.2%. Its shares have rallied 75.6% in a year.

Celanese has an expected long-term earnings growth rate of 8.9%. Its shares have gained 29% in a year.

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