Unisys Redeems Debt - Analyst Blog


Unisys Corporation ( UIS ) 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
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: UIS



More from Zacks.com:

Related Videos

Cheap Ways to Sleep Better
Cheap Ways to Sleep Better          




Most Active by Volume

  • $16.13 ▼ 0.19%
  • $101.32 ▲ 0.74%
  • $59.80 ▲ 7.34%
  • $26.15 ▼ 1.06%
  • $24.65 ▼ 0.96%
  • $99.05 ▲ 0.15%
  • $34.94 ▼ 0.60%
    $74.57 unch
As of 8/22/2014, 04:02 PM

Find a Credit Card

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