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Innophos Holdings (IPHS) Expands Credit Facility by $125M

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Innophos Holdings, Inc. has entered into a new senior secured credit facility with a group of bank lenders that will permit the company to extend its credit facility and provide financial flexibility to support growth plans. The new facility increases the company’s borrowing capacity by $125 million, taking it to $450 million, and also reduces the interest rate over the next five years.

The new credit facility replaces the one entered into on Dec 21, 2012, as subsequently amended. In addition to the $450 million credit allowance, the facility also has a feature of subfacility of up to $20 million. The company has an option to request an additional $150 million increase to the revolving line, with terms set in advance and subject to lenders’ agreement. The interest chargeable to the facility will be at London interbank offered rate (LIBOR) or base rate plus an initial margin of 175 basis points (bps) for LIBOR and 75 bps for base rate loans.

Innophos Holdings reported better-than-expected results in the third quarter, with earnings of 75 cents per share, which surpassed the Zacks Consensus Estimate of 66 cents by 13.64%. Moreover, the bottom line improved 14% year over year as fall in costs of sales and other operating expenses more than offset decline in revenues in the quarter.

In the quarters ahead, Innophos Holdings aims to benefit from its operational excellence, commercial excellence and strategic growth policies. The company believes that it might receive 75% of the $13−$15 million savings expected from operational excellence in 2016. New contract wins are likely to remain the prime growth boosters.

The company’s shares have increased 39.4% in the last 3 months, outperforming the Zacks categorized Chemical-Diversified industry’s gain of 10.3% in the same period.

 

 

Other Stocks to Consider

Innophos Holdings sports a Zacks Rank #1 (Strong Buy).

Other well-ranked companies in the basic materials space include The Chemours Company (CC - Free Report) , FMC Corp. (FMC - Free Report) and Celanese Corporation (CE - Free Report) .

Chemours has an expected long-term growth of 15.5% and sports a Zacks Rank #1. You can the complete list of today’s Zacks #1 Rank stocks here.

FMC, sporting a Zacks Rank #1, has an expected long-term growth of 10.88%.

Celanese has an expected long-term growth of 8.75% and carries a Zacks Rank #2 (Buy).

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