Legg Mason Inc. announced the pricing of an underwritten public offering of Junior Subordinated notes worth $500 million. The notes will bear a fixed interest rate of 5.45% and will be sold at a price equal to 100% of par.
The notes are slated to mature in 2056. The interest will be paid quarterly in arrears, with the first payment due on Dec 15, 2016. The offering is anticipated to close on Aug 8, 2016, subject to certain customary conditions.
J.P. Morgan Securities LLC – a division of JPMorgan Chase & Co. (JPM - Free Report) , Morgan Stanley & Co. LLC, a unit of Morgan Stanley (MS - Free Report) and Citigroup Global Markets Inc., a unit of Citigroup Inc. (C - Free Report) – are among the joint book-running managers for the offering.
The proceeds from the offering along with other funds will be used to repay the outstanding borrowings under its revolving credit facility. Further, fees and expenses related with the offering of Junior Subordinated Notes will be paid.
Notably, in March, Legg Mason announced the pricing of an underwritten public offering of senior notes worth $450 million, scheduled to mature in 2026 at a fixed interest rate of 4.750% and at a price equal to 99.954% of par. The proceeds from this offering will also be used to fund the impending buyouts. The proceeds from the offering along with other funds were used to complete acquisitions of Clarion Partners and EnTrust Capital along with fees and expenses associated with these deals.
Legg Mason also declared pricing of an underwritten public offering of junior subordinated notes worth $250 million, slated to mature in 2056 at a fixed interest rate of 6.375% and at a 100% par price. The proceeds from this offering were also used to fund the buyouts.
Our Viewpoint
The notes offering will lend the company some financial flexibility at this point. Legg Mason’s continued balance sheet strength along with its persistent focus on risk and expense management should drive growth going ahead.
We believe that the company’s latest acquisition spree will prove accretive to revenues. Legg Mason has the potential to outperform its peers over the long run, given its diversified product mix, strategic acquisitions and leverage to the changing market demography. However, several issues, including regulatory headwinds, raise caution.
Legg Mason currently carries a Zacks Rank #5 (Strong Sell).
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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Legg Mason Inc. announced the pricing of an underwritten public offering of Junior Subordinated notes worth $500 million. The notes will bear a fixed interest rate of 5.45% and will be sold at a price equal to 100% of par.
The notes are slated to mature in 2056. The interest will be paid quarterly in arrears, with the first payment due on Dec 15, 2016. The offering is anticipated to close on Aug 8, 2016, subject to certain customary conditions.
J.P. Morgan Securities LLC – a division of JPMorgan Chase & Co. (JPM - Free Report) , Morgan Stanley & Co. LLC, a unit of Morgan Stanley (MS - Free Report) and Citigroup Global Markets Inc., a unit of Citigroup Inc. (C - Free Report) – are among the joint book-running managers for the offering.
The proceeds from the offering along with other funds will be used to repay the outstanding borrowings under its revolving credit facility. Further, fees and expenses related with the offering of Junior Subordinated Notes will be paid.
Notably, in March, Legg Mason announced the pricing of an underwritten public offering of senior notes worth $450 million, scheduled to mature in 2026 at a fixed interest rate of 4.750% and at a price equal to 99.954% of par. The proceeds from this offering will also be used to fund the impending buyouts. The proceeds from the offering along with other funds were used to complete acquisitions of Clarion Partners and EnTrust Capital along with fees and expenses associated with these deals.
Legg Mason also declared pricing of an underwritten public offering of junior subordinated notes worth $250 million, slated to mature in 2056 at a fixed interest rate of 6.375% and at a 100% par price. The proceeds from this offering were also used to fund the buyouts.
Our Viewpoint
The notes offering will lend the company some financial flexibility at this point. Legg Mason’s continued balance sheet strength along with its persistent focus on risk and expense management should drive growth going ahead.
We believe that the company’s latest acquisition spree will prove accretive to revenues. Legg Mason has the potential to outperform its peers over the long run, given its diversified product mix, strategic acquisitions and leverage to the changing market demography. However, several issues, including regulatory headwinds, raise caution.
Legg Mason currently carries a Zacks Rank #5 (Strong Sell).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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