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Celanese Completes Refinancing of Secured Credit Facility

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Chemical and advanced materials maker, Celanese Corporation (CE - Free Report) , has announced the refinancing of its secured credit facility with a new credit facility, consisting of a $500 million unsecured term loan and a $1 billion unsecured revolver, each maturing in Jul 2021. The existing secured credit facility has been terminated accordingly.

This represents Celanese’s progression towards its goal of an Investment Grade credit rating. The company is working towards investment grade credit rating and has delivered considerable earnings growth. It has deleveraged its balance sheet along with maintaining its credit metric within the investment grade level.

The company also aims to maintain a healthy balance sheet which will enable it to implement its growth strategies. This will also reinforce Celanese’s disciplined M&A approach, encourage shareholder cash return commitments and lower its cost of borrowing. It plans to maintain a targeted leverage ratio of gross debt to EBITDA of 2.0 or lower on a long-term basis.

Celanese’s shares closed roughly 0.2% higher at $70.69 on Jul 18.
 


Celanese’s adjusted earnings for first-quarter 2016 were $1.83 per share, indicating a 6% increase from the prior-year quarter. Earnings per share also beat the Zacks Consensus Estimate of $1.52. Although revenues dropped roughly 3% year over year to $1,404 million in the quarter, the figure beat the Zacks Consensus Estimate.

Celanese also upgraded its outlook for 2016. It now expects an improvement of 8%−10% in earnings per share, compared to a 5%−10% growth stated earlier. The company intends to pursue commercial discipline coupled with excellence in operation and productivity to survive and grow in the current environment.

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

Better-ranked companies in the chemicals industry include Axiall Corporation , Stepan Company (SCL - Free Report) and FMC Corp. (FMC - Free Report) . While Axiall and Stepan sport a Zacks Rank #1 (Strong Buy), FMC Corp. carries a Zacks Rank #2 (Buy).

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