Allegheny Prices $500 Million Senior Notes - Analyst Blog


Specialty metals manufacturer company Allegheny Technologies Inc. ( ATI ) announced the pricing of public offering of its senior notes. The company will issue and sell $500 million aggregate principal amount of 5.875% Senior Notes due 2023.

Allegheny will be paying semi-annual interest in arrears at a rate of 5.875% per year on the Senior Notes. The notes, if not redeemed or repurchased earlier, will mature on Aug 15, 2023. The offering is being made following the effective shelf registration statement filed by the company with the Securities and Exchange Commission (the SEC).

Allegheny plans to utilize the proceeds from the offering to fund the general corporate purposes, which may include repurchases, repayment or refinancing of debt, capital expenditures, additions to working capital, and the financing of future acquisitions or strategic combinations.

The joint book-running managers for the offering are Merrill Lynch, Pierce, Fenner & Smith Incorporated, a wholly-owned subsidiary of Bank of America Corporation ( BAC ); and J.P. Morgan Securities LLC, the non-bank subsidiary of JPMorgan Chase & Co. ( JPM ).

Earlier, in Jan 2011, Allegheny had announced the pricing of another set of senior notes due 2021. The offering comprised $500 million aggregate principal amount of 5.950% senior notes due 2021. Allegheny paid semi-annual interest in arrears at a rate of 5.950% per year on the senior notes. The notes, if not redeemed or repurchased earlier, will mature on Jan 15, 2021.

Allegheny intended to utilize the net proceeds from the issuance of senior notes to fund the cash portion of the merger consideration for the acquisition of Ladish Co., Inc. (Ladish) and pay related fees and expenses. The remaining net proceeds were to be used for general corporate purposes.

J.P. Morgan, Citi, Morgan Stanley ( MS ) and BofA Merrill Lynch acted as the joint book-running managers for the Jan 2011 offering.

The public offering of senior notes is expected to enable Allegheny to attain financial flexibility and position the company well to pursue investment opportunities and acquisitions. This would facilitate the company's top-line improvement in the near term.

Allegheny, which holds a Zacks Rank #5 (Sell), is set to announce its second- quarter 2013 results on Jul 24

ALLEGHENY TECH (ATI): Free Stock Analysis Report

BANK OF AMER CP (BAC): Free Stock Analysis Report

JPMORGAN CHASE (JPM): Free Stock Analysis Report

MORGAN STANLEY (MS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ATI , BAC , JPM , MS

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