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American Axle (AXL) Plans to Propose $350M Senior Notes

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American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) reported that its subsidiary, American Axle & Manufacturing, Inc. (“AAM”) is planning to propose senior notes worth $350 million via a public offering.

The interest rate of these senior notes will be determined at the time of pricing and will be unconditionally guaranteed on a senior unsecured note by American Axle & Manufacturing Holdings and partly by AAM’s present and future subsidiaries.

The company will use the proceeds from this offering, along with cash in hand and amount available in its credit agreement, to fund its outstanding senior notes, which are due to mature on 2021 and bear an interest rate of 6.25%. In addition to the debt amount, the company will also pay for the accrued interest and premium, if applicable.

American Axle & Manufacturing Holdings, Inc. Price and Consensus

On Feb 16, American Axle posted adjusted earnings of 89 cents per share for the fourth quarter of 2017, beating the Zacks Consensus Estimate of 77 cents. Also, revenues were $1.73 billion, beating the Zacks Consensus Estimate of $1.69 billion.

Moreover, the stock saw the Zacks Consensus Estimate for annual earnings being revised 1.4% upward over the last seven days while having a long-term growth rate of 8.1%.

Price Performance

In the last six months, shares of American Axle underperformed the industry it belongs to. During the period, the company’s stock declined 1.9% in comparison with the industry’s gain of 6.8%.

 

Zacks Rank & Key Picks

American Axle carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are General Motors Company (GM - Free Report) , Honda Motor Co. Ltd. (HMC - Free Report) and LKQ Corporation (LKQ - Free Report) . General Motors and Honda sport a Zacks Rank #1 (Strong Buy), while LKQ Corp holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

General Motors has an expected long-term growth rate of 8.4%. In the last six months, shares of the company declined 2.5%.

Honda has an expected long-term growth rate of 5.2%. Shares of the company gained 19.9% in the last six months.

LKQ Corp has an expected long-term growth rate of 16%. In the last six months, shares of the company gained 10.4%.

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