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Analyst Actions: Credit Suisse Provides Notes After Meeting with Canadian Industrial and Mining Cos

Credit Suisse provides notes focused on both the state of equipment markets (new and used) and the copper project pipeline after recent meetings with Canadian Industrial and Mining companies.

No Equity Issuance for BUCY Deal. "Finning management was confident that it will not have to issue equity to buy the Bucyrus distribution channel from Caterpillar. We believe the company has ample debt capacity to close on the deal (renewed revolver has ~$2bln of upside potential). Finning remains very disciplined in price negotiations and is looking at the deal from an NPV basis. In our view, we would also not be surprised to see a deal with Finning and BUCY announced prior to year end."

Equipment Auctions Returning to Normal. "RBA believes that business conditions are returning to normal in Q4 after there was a pause in customers bringing equipment to market. The dealer channel on new equipment continues to be very light given stretched lead times. In addition, given the tightness of the used equipment market place, more dealers and brokers are beginning to compete with RBA for volume. This trend has continued into Q4 and will likely not subside until lead times on new equipment come off."

Availability of Equipment Still An Issue For Mining Companies. "Both Teck and Pan American cited infrastructure, people costs, inflation and equipment lead times as bottlenecks for new projects outside of permitting. In addition, large mining companies with diversified portfolios continue to order equipment from dealers in advance given lead times and the fact that they have the ability to redeploy the equipment to various mines so order timing becomes less of an issue."

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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