Invesco Prices $600M Senior Notes - Analyst Blog


On Monday, Invesco Ltd. ( IVZ ) announced the pricing of $600 million worth of 3.125% senior notes, having maturity dates in 2022. The offering is expected to culminate on November 8, subject to customary closing conditions.

The notes are offered at a price of 99.921% of the principal amount. These notes will pay interest on a semi-annual basis in arrears.

Invesco stated that the net proceeds from the offering will be deployed for repayment (in part or full) of amounts drawn on the credit facility. Moreover, the funds will be utilized to purchase, redeem or retire the existing 5.375% senior notes due in 2013 and 5.375% senior notes maturing in 2014. The remaining amount, if any, will be utilized for general and corporate purposes.

The joint book-running managers for this senior notes offering are Citigroup Global Markets Inc. - a division of Citigroup, Inc. ( C ); Merrill Lynch, Pierce, Fenner & Smith Incorporated - a subsidiary of Bank of America Corporation ( BAC ) and Morgan Stanley & Co. LLC - a unit of Morgan Stanley ( MS ).

The main idea behind this debt refinancing is to further lower Invesco's interest expenses. Total interest expenses as of September 30, 2012 stood at $39.6 million, down 17% from the prior-year period. Further, Invesco reported total debt of $1,285.1 million as of September 30, 2012, against $1,284.7 million as of December 31, 2011. Additionally, credit facility balance was $754.5 million as of September 30, 2012, as against $811.0 million as of June 30, 2012.

In the stringent regulatory landscape, the aforementioned offering is expected to further strengthen Invesco's balance sheet as well as support its future growth. Additionally, it will help the company bring down its cost of capital.

Invesco currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we also maintain a long-term Neutral recommendation on the stock.

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

CITIGROUP INC (C): Free Stock Analysis Report

INVESCO LTD (IVZ): 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 OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: BAC , C , IVZ , MS

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