) or "TI", the largest manufacturer of analog semiconductor
products, has recently announced the pricing of senior unsecured
notes aggregating $500 million. These bonds have been issued in
two tranches of same amounts but with varying coupon rates and
maturities. The offering is expected to close on Mar 12, 2014,
subject to customary closing conditions.
The first and second tranches of $250 million each, carrying a
coupon rate of 0.875% and 2.750%, are due to mature in 2017 and
Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner
& Smith Incorporated, Mizuho Securities USA Inc., J.P. Morgan
Securities LLC, Mitsubishi UFJ Securities (USA), Inc. and Morgan
Stanley & Co. LLC, will act as joint book-running managers
for the offering. Texas Instruments stated that the proceeds
would be used for repaying outstanding debt.
TI remains one of the best positioned analog companies, given
its compelling product line, the increased differentiation in its
business and lower-cost 300-mm capacity. In the recently reported
quarter, the company spent $326 million on cash dividends and
used $734 million to repurchase its common stock.
At quarter-end, TI had $4.16 billion in long-term debt and
$1.00 billion in short-term debt. During the quarter, the net
debt position declined $239 million. It also had net underfunded
retirement plans of $86 million. The issuance of these notes will
increase the company's total debt to $5.66 billion from $5.16
billion, taking the debt-to-total capitalization ratio to
We believe strong balance sheet will help Texas Instruments to
capitalize on investment opportunities and make strategic
acquisitions, further improving its growth prospects. We believe
the senior notes offering will bring down its cost of capital,
thus strengthening the balance sheet and supporting future
Currently, TI has a Zacks Rank #3 (Hold). Other stocks that
are performing well currently are
, Six Flags Entertainment Corporation
SFX Entertainment Inc.
). All these stocks carry a Zacks Rank #2 (Buy).
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