CBRE Group Inc.
) has recently disclosed the accomplishment of its debt
refinancing activities. The move is a strategic fit as it would
help improve the company's financial flexibility through lowering
of debt and interest expenses, meet near term obligations and
prolong maturity dates.
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Specifically, the amendment and restatement of CBRE's senior
secured credit agreement would provide for a $715 million term
loan facility and a $1.2 billion revolving credit facility
(increased from $700 million).
Earlier this month, CBRE issued $800 million of 10-year senior
unsecured notes. Coupled with its available cash, these moves
have strengthened the company's balance sheet and it now intends
to pay off its 11.625% senior subordinated notes worth $450
million in Jun 2013. Eventually, the steps would help CBRE lower
its debt level by around $500 million as well as interest
expenses by nearly $50 million.
We believe the refinancing measures will position CBRE favorably
and increase its flexibility. The company would remain well
positioned to pursue investment opportunities and acquisitions,
which would help enhance its top-line growth in the midst of the
current unsettled environment.
Notably, CBRE came up with impressive fourth-quarter 2012
results, after posting disappointing results in the prior
quarter. The company's adjusted earnings of 55 cents per share
surpassed the Zacks Consensus Estimate by 6 cents.
Aided by strong top-line growth in all operating regions, this
leading commercial real estate services firm bounced back to the
growth trajectory in the reported quarter. As of Dec 31, 2012,
the company's cash position stood at $1.09 billion.
CBRE Group currently carries a Zacks Rank #3 (Hold). REIT's that
are performing better and are worth a look include
Federal Realty Investment Trust
Brandywine Realty Trust
Cousins Properties Inc.
). All these stocks carry a Zacks Rank #2 (Buy).