CAE Inc. (CAE - Snapshot Report), a provider of simulation equipment announced an issue of senior unsecured notes.
The notes are worth roughly US$350 million and carry both fixed and floating rates of interest, where the floating rates vary from 3.6 to 4.2 percent. The maturity of the notes is estimated to range from seven to fifteen years. The proceeds from the offer will be utilized to refinance the existing debt.
The notes are privately issued in several US and Canadian dollar denominated tranches, including 11 large institutional investors in both the countries.
The company has a strong balance sheet with a sturdy cash position. Exiting the second quarter of fiscal 2013, the company had cash and cash equivalents of CAD229.4. Along with this, CAE generated CAD45.4 million in operating activities for the quarter as compared to CAD129.2 million in the year ago comparable quarter. Total interest paid for the quarter reached CAD13.8 million against CAD10.3 million for the second quarter of fiscal 2012. At the end of second quarter of fiscal 2013, the company had approximately $995 million in net debt.
CAE is a world leader in providing simulation and modeling technologies, along with training and company design. This includes integrated modeling, simulation and training solutions for commercial airlines, aircraft manufacturers and military organizations and a global network of training centers for pilots. The company, headquartered in Canada, operates in over 30 countries along with over 100 training centers globally. Along with the current operations, the company is leveraging its simulation capabilities in industries such as healthcare and mining.
The company currently holds a Zacks #3 Rank (a short-term ‘Hold’ rating). The company faces stiff competition from AAR Corp. (AIR - Analyst Report), holding a Zacks #3 Rank and Triumph Group Inc. (TGI - Analyst Report), holding a Zacks #1 Rank, (a short-term ‘Strong Buy’ rating).