) recently completed the previously announced redemption of 12.5%
senior notes worth $84.5 million due 2016.
Earlier on July 25, 2012, the company announced that it
will redeem $84.5 million of its 12.5% senior notes due January
2016. However, Unisys expects to incur a charge of approximately
$6.4 million in the third quarter of 2012 related to this
redemption. The debt reduction will result in an approximate $10
million decline in annual interest expense.
Additionally, Unisys intends to redeem $26,097,000 of the 12.5%
senior notes that remain outstanding. These remaining notes will be
redeemed at a price of 106.250% of their principal amount. The
redemption will be completed on September 24, 2012.
In the first half of 2012, Unisys repaid a long-term debt worth
$68.5 million. This comprises all of the remaining $25.5 million of
its 14.25% senior secured notes due 2015, $40.0 million of its
12.5% senior notes due 2016 and $3.0 million of its 12.75% senior
secured notes due 2014.
Unisys is consistently taking steps to reduce its debt, and
targets a debt of $85 million by 2013 end. In 2011, Unisys reduced
its debt by 56% or $464 million year over year to $360 million.
Unisys has also called for redemption of all $183,106,000 of its
12 3/4% senior secured notes due 2014. This redemption is expected
to be completed on September 20, 2012.
These redemptions will result in an aggregate charge of
approximately $23 million in the third quarter of 2012,
Last week, Unisys completed its previously announced offering of
$210,000,000 of senior notes.
Management intends to use net proceeds from this offering to
redeem all of the company's outstanding 12.75% senior secured notes
due 2014, including payment of accrued interest and premium.
The macroeconomic conditions continue to be challenging for
Unisys. We have a Neutral recommendation on the stock. The stock
currently carries a Zacks #1 Rank, which translates into a
short-term rating of Strong Buy.
UNISYS (UIS): Free Stock Analysis Report
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