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Celanese (CE) Prices $7.5B Financing for DuPont M&M Buyout

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Celanese Corporation (CE - Free Report) priced $7.5 billion in permanent financing to acquire most of DuPont’s Mobility & Materials (M&M) business.

The company stated that its subsidiary, Celanese US Holdings LLC, has priced a registered offering of $7.5 billion in total principal amount of notes of various maturities with interest rates ranging from 5.91% to 6.38%. The notes will be guaranteed on a senior unsecured basis by Celanese and certain of its domestic subsidiaries, similar to prior issuances. The offering is projected to complete on or about Jul 14, 2022.

It simultaneously entered into a cross-currency swap to convert $2.5 billion of the U.S. dollar denominated notes into euro-denominated borrowing at prevailing euro interest rates.

The effective net borrowing rate to the company will be roughly 5.6%, inclusive of the yield on the notes and the beneficial impact of the currency swap.

Shares of Celanese have declined 25.1% in the past year compared with a 22.9% fall of the industry.

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Celanese, in its last earnings call, stated that it continues to demonstrate the capability of its Engineered Materials and Acetyl Chain business models to deliver solid performance amid continued cost inflation and various external disruptions to its supply chain.

With moderation in the pricing of upstream products within the Acetyl Chain, the company anticipates strength in downstream Acetyl Chain products and strong performance in Engineered Materials to drive second-quarter adjusted earnings of roughly $4.50 per share.

 

Zacks Rank & Key Picks

Celanese currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Nucor Corporation (NUE - Free Report) , Cabot Corporation (CBT - Free Report) and Nutrien Ltd. (NTR - Free Report) .

Nucor has a projected earnings growth rate of 28.5% for the current year. The Zacks Consensus Estimate for NUE's current-year earnings has been revised 41.9% upward in the past 60 days.

Nucor’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 2.2%, on average. NUE has gained around 13.8% in a year and currently sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cabot, currently sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 22.5% for the current year. The Zacks Consensus Estimate for CBT's earnings for the current year has been revised 6% upward in the past 60 days.

Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 12.5% over a year.

Nutrien has a projected earnings growth rate of 174.6% for the current year. The Zacks Consensus Estimate for NTR’s current-year earnings has been revised 30.7% upward in the past 60 days.

Nutrien’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 5.8%. NTR has gained 25.8% in a year. The company carries a Zacks Rank #2.