) is offering 4.75% senior secured notes worth $400 million with
maturity scheduled in 2023.
The proceeds from the issuance will be deployed to pay off the
pending amount of the company's senior secured credit facility
and related expenses as well as for general corporate purposes.
WEX is expected to close the transaction on January 30, 2013. The
new issuance will require the company to pay interests
As of Sep 30, 2012, the debt-to-capital ratio for the company was
0.28x which represented an improvement of 1 percentage point from
0.29x at 2011 end. However, the current issuance of $400 million
will have no material impact on the debt-to-capital ratio.
The new issuance would require WEX to pay an annual interest of
$19 million. Nevertheless, the company's solid operational
performance generates enough funds to service the debt
uninterruptedly. Its interest expense in the third quarter
reduced 14.3% year over year.
), from the same industry, decided to offer $500 million
aggregate principal amount of 3.30% senior notes. The company
intended to utilize the proceeds from the issuance to fund its
pending acquisition of certain credit services assets from CSC
Credit Services Inc. partially.
WEX is expected to release its fourth-quarter and full year 2012
earnings results on Feb 6. The Zacks Consensus Estimate for the
fourth quarter is currently pegged at $1.06 translating into
year-over-year improvement of 8.3%. Earnings for full year 2012
are expected to be $4.06 per share up 11.6% year over year.
WEX carries a Zacks Rank #3 (Hold). Other payment processors
Heartland Payment Systems Inc.
) carries Zacks Rank #1 (Strong Buy) while
) carries Zacks Rank #2 (Buy) and are worth noting.
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