In a bid to finance senior subordinated notes due 2017,
) has priced $850 million senior notes in a new offering
(excluding underwriting discounts and commissions or other
offering expenses). The notes are priced at an issue price of
100% and carries a coupon rate of 6%.
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Terex anticipates the offering to be completed by November 26,
2012, subject to certain customary conditions. Credit Suisse
Securities (USA) LLC, Goldman, Sachs and Co. - a wing of
The Goldman Sachs Group, Inc.
), RBS Securities Inc. - a unit of
The Royal Bank of Scotland Group plc
) and UBS Securities LLC - an entity of
) will be acting as the joint book-running managers for the
Terex will use the net proceeds from the offering to finance the
purchase of its outstanding senior subordinated notes bearing an
interest of 8% due 2017. The amount left will be utilized in
general corporate purposes.
Terex reported that its third-quarter 2012 adjusted earnings
jumped 107% year over year to 62 cents per share. The results
comfortably surpassed the Zacks Consensus Estimate of 50 cents.
Total revenues increased 1% year over year to $1.822 billion,
missing the Zacks Consensus Estimate of $1.952 billion.
Terex had cash and cash equivalents of $542.6 million as of
September 30, 2012, versus $774.1 million as of December 31,
2011. The company's total debt was $2.03 billion of as of
September 30, 2012, compared with $2.3 billion as of December 31,
The debt to capital ratio improved to 49.7% as of September 30,
2012, from 54.6% as of December 31, 2011. In the stringent
regulatory background, the offering of the senior notes is
expected to further strengthen the company's balance sheet as
well as support its future growth.
Terex is a global equipment manufacturer catering to the
construction, infrastructure, and surface mining industries. The
company's manufacturing facilities are located in the U.S.,
Canada, Europe, Australia, Asia, and South America. It sells its
products through a worldwide distribution network. The company
has five reporting segments.
Terex faces competition from large players with greater financial
Deere and Company
). Terex retains a short-term Zacks #3 Rank (Hold). We have a
long-term Neutral recommendation on the stock.