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SunCoke Energy (SXC) Completes Pricing $500M Senior Notes
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SunCoke Energy, Inc. (SXC - Free Report) completes pricing its offering of senior secured notes worth $500 million due Jun 30, 2029. The interest will be payable on a semi-annual basis with the annual rate being 4.875%.
The notes will be issued at face value and the offering is likely to close on Jun 22, 2021, subject to customary closing conditions. Earlier, the company along with its subsidiaries announced that it amended its existing revolving credit agreement to reduce the borrowing capacity to $350 million and extend the maturity date to June 2026. This change is pending certain regulatory approvals.
Motive Behind the Move
The company is fully utilizing the low interest rate scenario and issuing new debts with low interest rates. Further, it is utilizing the proceeds to repay the existing high-interest bearing old debts.
Net proceeds from the new offering along with borrowings under the amended revolving credit facility will be used to redeem the company’s subsidiary SunCoke Energy Partners Finance Corp.'s outstanding 7.500% senior unsecured notes due 2025, which it had unconditionally guaranteed. This move will not only extend the debt maturity schedule but also trim the company’s capital-servicing costs.
Net interest expenses of the company in the first quarter of 2021 were $12.7 million compared with $14.6 million in the year-ago period.
Current Debt Situation
SunCoke Energy’s long-term debt and financing obligation amounted to $641.6 million at the end of the first quarter of 2021, down from the December-end figure of $673.9 million. Currently, the company’s total debt to total capital stands at 55.68% compared with 2020 end’s figure of 57.47%.
As of Mar 31, 2021, its liquidity amounted to $386 million, up from $348 million as of Dec 31, 2020. Its times interest earned (TIE) ratio of 1.52 in the March quarter is higher than 1.34 in the December quarter. Improving TIE ratio indicates that the firm has adequate financial flexibility to meet its debt obligations.
Peer Moves
Other companies from the same sector are also making efforts to either refinance or reduce debt or trim interest costs. In June, Plains All Pipeline L.P. (PAA - Free Report) entered into a definite agreement to sell Pine Prairie and Southern Pines natural gas storage facilities for $850 million to a unit of Hartree Partners, LP. It will use some portion of the proceeds from the sale of non-core assets to reduce debt levels.
In March, Murphy Oil (MUR - Free Report) priced its offering of 6.375% senior notes worth the value of $550 million with a maturity date falling in 2028. Net proceeds from the same will be used in redeeming notes due in 2022. Also, Devon Energy (DVN - Free Report) intends to repurchase $1.5 billion debt by 2021 end, which is expected to lower its interest expenses by $75 million, annually.
In the past year, shares of the company have gained 143.7%, outperforming the industry’s 86.1% rise.
One Year Price Performance
Image Source: Zacks Investment Research
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Image: Bigstock
SunCoke Energy (SXC) Completes Pricing $500M Senior Notes
SunCoke Energy, Inc. (SXC - Free Report) completes pricing its offering of senior secured notes worth $500 million due Jun 30, 2029. The interest will be payable on a semi-annual basis with the annual rate being 4.875%.
The notes will be issued at face value and the offering is likely to close on Jun 22, 2021, subject to customary closing conditions. Earlier, the company along with its subsidiaries announced that it amended its existing revolving credit agreement to reduce the borrowing capacity to $350 million and extend the maturity date to June 2026. This change is pending certain regulatory approvals.
Motive Behind the Move
The company is fully utilizing the low interest rate scenario and issuing new debts with low interest rates. Further, it is utilizing the proceeds to repay the existing high-interest bearing old debts.
Net proceeds from the new offering along with borrowings under the amended revolving credit facility will be used to redeem the company’s subsidiary SunCoke Energy Partners Finance Corp.'s outstanding 7.500% senior unsecured notes due 2025, which it had unconditionally guaranteed. This move will not only extend the debt maturity schedule but also trim the company’s capital-servicing costs.
Net interest expenses of the company in the first quarter of 2021 were $12.7 million compared with $14.6 million in the year-ago period.
Current Debt Situation
SunCoke Energy’s long-term debt and financing obligation amounted to $641.6 million at the end of the first quarter of 2021, down from the December-end figure of $673.9 million. Currently, the company’s total debt to total capital stands at 55.68% compared with 2020 end’s figure of 57.47%.
As of Mar 31, 2021, its liquidity amounted to $386 million, up from $348 million as of Dec 31, 2020. Its times interest earned (TIE) ratio of 1.52 in the March quarter is higher than 1.34 in the December quarter. Improving TIE ratio indicates that the firm has adequate financial flexibility to meet its debt obligations.
Peer Moves
Other companies from the same sector are also making efforts to either refinance or reduce debt or trim interest costs. In June, Plains All Pipeline L.P. (PAA - Free Report) entered into a definite agreement to sell Pine Prairie and Southern Pines natural gas storage facilities for $850 million to a unit of Hartree Partners, LP. It will use some portion of the proceeds from the sale of non-core assets to reduce debt levels.
In March, Murphy Oil (MUR - Free Report) priced its offering of 6.375% senior notes worth the value of $550 million with a maturity date falling in 2028. Net proceeds from the same will be used in redeeming notes due in 2022. Also, Devon Energy (DVN - Free Report) intends to repurchase $1.5 billion debt by 2021 end, which is expected to lower its interest expenses by $75 million, annually.
Zacks Rank & Price Performance
Currently, the stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past year, shares of the company have gained 143.7%, outperforming the industry’s 86.1% rise.
One Year Price Performance
Image Source: Zacks Investment Research
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>