Industrial gas producer and supplier,
) recently priced $650 million worth of Notes, offered under the
company's universal shelf registration statement. The offering
will consummate on May 7, 2013.
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The notes have been issued by Praxair in two tranches. The first
lot consists of $475 million worth of notes that are due to
expire on Nov 7, 2018. These carry a coupon rate of 1.250% and
are expected to yield 1.258% on maturity. The second lot
comprises $175 million worth of notes carrying a coupon rate of
3.550% and yield on maturity of 3.774%. These notes are due to
expire on Nov 7, 2042.
The offer price for notes due 2018 and 2042 has been fixed at
99.958% and 96.035%, respectively, of principal amount. Interest
will be paid semi-annually on May 7 and Nov 7. The first
installment falls due on Nov 7, 2013. Praxair intends to use the
proceeds from the issuance for repaying debt, share repurchases
and for general corporate purposes.
Issuance of notes has been a consistent mode of raising funds
from the market for Praxair. If we steal a look into the past few
quarters, the company had raised funds from the market amounting
to $1,400 million in Feb 2013, $700 million in Nov 2012, $500
million in Aug 2012 and $600 million in Feb 2012 through issuance
Exiting the first quarter 2013, long-term debt balance of Praxair
stood at $7,772.0 million, up 16.3% sequentially. Interest paid
during the quarter totaled $40 million, up 8.1% year over year.
Rising debt burden will increase the company's financial
obligations all the more in the quarters ahead.
The current Zacks Consensus Estimate for the second quarter of
2013 is $1.49, representing a year-over-year increase of 5.1%.
Estimates for years 2013 and 2014 are $5.99 and $6.82, reflecting
annual growth of 7.6% and 13.8%, respectively.
Praxair currently has a market capitalization of $33.8 billion
and carries a Zacks Rank #3 (Hold). Other stocks to watch out for
in the industry are
Shin-Etsu Chemical Co., Ltd.
), with a Zacks Rank #1 (Strong Buy) while
Compass Minerals International Inc.
) each carries a Zacks Rank #2 (Buy).