Specialty alloys maker
Carpenter Technology Corporation
) has successfully completed the $500 million syndicated credit
facility. This five-year credit facility replaces the previous
$350 million revolver, which was due to expire in Jun, 2016.
The terms and conditions of the new facility are mostly
similar to the previous agreement. Debt to capital ratio and
interest coverage ratio, the two financial covenants, are likely
to remain the same.
However, pricing was enhanced with a 15 basis point Commitment
Fee replacing the prior 20 basis point Facility Fee. This led to
a reduction in the all-in drawn fee by 15 basis points at the
prevailing rating level.
A syndicate of ten lenders offered loan for this new facility
and was oversubscribed before the actual allocations started.
This new credit facility adds to Carpenter's overall growth
strategy by contributing to its financial structure.
The joint lead arrangers for the credit facility are J.P.
Morgan Securities LLC, the non-bank subsidiary of
JPMorgan Chase & Co.
), and Merrill Lynch, Pierce, Fenner & Smith Incorporated, a
wholly-owned subsidiary of
Bank of America Corporation
Carpenter Technology, a major player in the specialty steel
industry along with
Sutor Technology Group Limited
), posted adjusted earnings (excluding special items) of 69 cents
per share for third-quarter fiscal 2013 (ended Dec 31, 2012).
Reported earnings dropped from 84 cents a share recorded in the
year-ago quarter and also missed the Zacks Consensus Estimate of
Profit decreased 0.3% year over year to $32.9 million.
Earnings growth attributable to the acquisition of Latrobe was
offset by lower SAO earnings as a result of in-quarter mix
degradation, increased deferrals and related loss of
manufacturing overhead cost absorption.
Revenues rose 7.68% year over year to $581.4 million in the
reported quarter. However, it missed the Zacks Consensus Estimate
of $636 million. Barring surcharge revenues, sales grew by 12% or
$52.2 million year over year owing to the inclusion of Latrobez.
Sales were hurt by increased customer deferrals during the
quarter, combined with low sales to distribution customers and a
weak defense related mix. However, significant growth is achieved
in the aerospace and energy markets.
Carpenter expects full year 2013 earnings to be lower than the
earlier projection due to the recent pattern of slower customer
deferrals and increased intake of orders. The company continues
to see low double-digit growth in operating income for fiscal
2013. However, it noted that achieving this target will be
difficult if the fourth quarter experiences similar in-quarter
mix and deferrals as witnessed in the third quarter.
Carpenter currently retains a Zacks Rank #4 (Sell).
BANK OF AMER CP (BAC): Free Stock Analysis
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