Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Tobacco giant Reynolds American Inc. (RAI - Analyst Report) has recently commenced the public offering of senior notes worth $1.1 billion in two parts.

The first part of the notes offering, carrying an interest rate of 4.9% and scheduled to mature in 2023, will raise $550.0 million. The second part of senior notes worth $550.0 million, carrying an interest rate of 6.15%, will mature in 2043.

Reynolds is selling the notes under its effective shelf registration statement filed with the Securities and Exchange Commission. Citigroup Inc. (C - Analyst Report), J.P. Morgan (JPM - Analyst Report), Goldman Sachs  (GS - Analyst Report), Credit Suisse (CS - Snapshot Report), Fifth Third Bancorp (FITB - Analyst Report), Mizuho Financial Group (MFG - Snapshot Report), RBC Capital Markets, LLC and Scotia Capital (USA) Inc are acting as administrative agents for the purpose, along with certain other lenders.

The notes will be sold until Sep 17, 2013. The proceeds from the sale will be used to redeem outstanding notes worth $200 million carrying 7.3% interest due to mature in 2015 and $775 million worth of notes carrying 7.625% interest and due in 2016. The balance is expected to be used to repay some or all of the $150 million term loan, to pay accrued and unpaid interest, and for other general corporate purposes.

Reynolds American, which carries a Zacks Rank #3 (Hold), exited the second quarter with a cash and cash equivalents of $1.7 billion, compared with $2.8 billion in the prior quarter. Long-term debt in the quarter remained flat sequentially at $5.02 billion. RAI spent $150 million to purchase 3.1 million shares under the company’s $1.8 billion share repurchase program.

In its recently concluded second quarter of fiscal 2013, Reynolds surpassed both year-ago results as well as the Zacks Consensus Estimate on the back of positive pricing and higher profit.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%