In two separate announcements yesterday, industrial tool maker
Stanley Black & Decker Inc.
) announced its intention to sell Equity Units and priced
fixed-to-floating rate debentures. Net proceeds generated from
the offering will be used by the company for general corporate
Stanley Black & Decker's Equity Units offering will comprise
of $300 million principal amount of junior subordinated notes due
2018 and $300 million worth of common shares to be offered
through purchase contracts. Delivery of common stock will depend
on purchase contract settlement in Nov 2016.
Stanley Black & Decker intends to issue as many as 3,000,000
Equity Units or roughly 3,450,000 Units in the event of
over-allotment option exercised in full by the underwriters.
Besides the Equity Units offering, Stanley Black & Decker has
priced $400 million worth of Fixed-to-Floating Junior
Subordinated Debentures. The debentures, offered under the
company's universal shelf registration statement filed with the
U.S. Securities and Exchange Commission has been offered at
100.0% of the principal amount. The offering will consummate on
Dec 3, 2013.
The Debentures are due to mature on Dec 15, 2053 and carry an
interest rate of 5.75% per annum during the fixed-rate period.
Interest will be paid semi-annually on Jun 15 and Dec 15. The
first interest installment will be paid on Jun 15, 2014. During
the floating-rate period, interest will be three-month
LIBOR+4.304% and will be paid quarterly beginning from Mar 15,
Stanley Black & Decker's debentures issuance has been rated
'BBB' by Fitch Ratings while ratings of 'Baa2' and 'BBB+' are
expected from Moody's Investors Service and Standard &
The twin offerings of Stanley Black & Decker will increase
the company's debt balances that in turn will increase its
financial obligations. Long-term debt, net of current maturities,
is anticipated to increase 20.6% from the balance at the end of
third quarter 2013. Earnings to Fixed Charges ratio of 5.1x for
the nine months ended Sep 28, 2013 will get a further boost after
the issuances announced are completed. This ratio was 4.4x for
Stanley Black & Decker currently has $12.5 billion market
capitalization and carries a Zacks Rank #4 (Sell). Some
better-ranked stocks in the Industrial Products sector include
Norsk Hydro ASA
). NSK Ltd. and NN Inc carry Zacks Rank #1 (Strong Buy) while
Norsk Hydro is rated Zacks Rank #2 (Buy).
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NN INC (NNBR): Free Stock Analysis Report
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STANLEY B&D INC (SWK): Free Stock Analysis
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