Offshore oilfield equipment manufacturer
FMC Technologies Inc.
) recently announced that it will be offering $800 million of
senior unsecured notes. The offering is divided into two parts -
$300 million 2.0% senior notes due 2017 and $500 million 3.45%
senior notes due 2022.
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The company plans to utilize the proceeds for the repayment of
outstanding commercial paper and borrowings under its revolving
FMC Technologies expects the proceedings to be complete on
September 21, 2012, upon fulfillment of customary closing
The company ended the second quarter of 2012 with long-term
borrowings of $1,216.2 million. The debt-to-capital ratio was 43.2%
at the quarter end. With the issuance of $800 million of debt, the
debt-to-capital ratio will increase to 55.8%.
We also expect interest expenses to increase with the sale of the
Incorporated in 2000, Houston, Texas-based FMC Technologies Inc. is
a leading manufacturer and supplier of technology solutions for the
energy industry. The company conducts its operations in three
segments: Subsea Technologies, Surface Technologies and Energy
Order flow and backlog for subsea products and services will
continue to be healthy and trend higher. FMC Technologies remains
well positioned to receive a large share of big contracts moving
forward. We are further encouraged by the company's recent subsea
equipment deals with industry giants like
Royal Dutch Shell plc
Petroleo Brasileiro S.A.
FMC shares currently retain a Zacks #3 Rank, which translates into
a short-term Hold rating. We are also maintaining our long-term
Neutral recommendation on the stock.