Texas Instruments Prices Senior Notes - Analyst Blog

By
A A A

Texas Instruments ( TXN ) or "TI," the largest manufacturer of analog semiconductor products, has recently announced the pricing of senior unsecured notes aggregating $1 billion. 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 May 8, 2013, subject to customary closing conditions.

The first and second tranches of $500 million each, carrying a coupon rate of 1.00% and 2.25%, are due to mature in 2018 and 2023, respectively.

J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., and Mizuho Securities USA Inc. will be acting as joint book-running managers for the offering. Texas Instruments stated that the transaction proceeds would be used for the repayment of its 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 300mm capacity. In the recently reported first quarter, the company spent $232 million on cash dividends and used $679 million to repurchase its common stock.

At quarter-end, TI had $4.2 billion in long-term debt and $1.5 billion in short-term debt on its balance sheet. During the quarter, the net debt position moved up slightly.The issuance of these notes will increase the company's total debt to $6.7 billion from $5.7 billion, taking the debt-to-total capitalization ratio to 37.9%. 

We believe that Texas Instruments has a strong balance sheet, which will help the company 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 company's balance sheet and supporting its future growth.

Currently, TI has a Zacks Rank #2 (Buy), while most of its peers have a Zacks Rank #3 (Hold). Other stocks in the sector that are performing well currently are Applied Materials ( AMAT ), Fiserv Inc. ( FISV ) and Stmicroelectronics ( STM ). While Applied carries a Zacks Rank #1 (Strong Buy), Fiserv and STMicroelectronics carry a Zacks Rank #2 (Buy).



APPLD MATLS INC (AMAT): Free Stock Analysis Report

FISERV INC (FISV): Free Stock Analysis Report

STMICROELECTRON (STM): Free Stock Analysis Report

TEXAS INSTRS (TXN): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



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: AMAT , FISV , STM , TXN

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

Most Active by Volume

33,110,376
  • $113.99 ▲ 1.77%
25,034,179
    $17.98 unch
24,486,872
  • $7.41 ▲ 2.07%
20,864,535
  • $7.39 ▼ 2.76%
18,600,501
  • $8.30 ▼ 0.36%
17,530,211
  • $8.14 ▲ 3.17%
17,299,208
  • $93.79 ▲ 2.74%
14,669,760
  • $25.78 ▼ 0.19%
As of 12/26/2014, 04:15 PM


Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com