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U.S. Silica (SLCA) Closes TLB Repricing & $25M Loan Buyback
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U.S. Silica Holdings, Inc. (SLCA - Free Report) recently declared that it has completed the repricing of its seven-year $950 million senior secured Term Loan B (TLB) due Mar 23, 2030.
The repricing was completed at the tight end of guidance at 99.75, lowering the interest rate margin applicable to the TLB by 75 basis points from 4.75% with a floor of 50 basis points to 4.00% with a floor of 50 basis points for SOFR term loans. Furthermore, the repricing removed the 10 basis point Term SOFR Adjustment for term loans and lowered the soft call period from 12 to six months.
In addition to the repricing transaction, SLCA made a $25 million voluntary term loan principal repayment. The debt was extinguished at par with cash on hand. In the last seven quarters, U.S. Silica has repurchased $359 million in debt, cutting its debt payment expenses in today's high interest rate environment.
U.S. Silica's continued strong performance and strategic measures to decrease debt, strengthen its balance sheet and improve its leverage profile are significant.
The stock has lost 6.1% over the past six months against a 5.1% rise of its industry.
Image Source: Zacks Investment Research
SLCA, on its fourth-quarter call, said that the oil and gas sector is experiencing a multi-year growth phase. Favorable commodity prices and improved efficiencies in well completion pave the way for an active environment in the forthcoming years, with the company’s sand production capacity secured by strong contractual commitments for the current year.
U.S. Silica maintains its key emphasis on generating operational cash flow and lowering leverage on the balance sheet. The company foresees significant operating cash flow in 2024, allocating around $60 million in capital expenditures for the year.
U.S. Silica currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Denison Mines Corp. (DNN - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Ecolab Inc. (ECL - Free Report) .
Denison Mines sports a Zacks Rank #1 (Strong Buy). DNN beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 300%. The company’s shares have soared 91.6% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology currently carries a Zacks Rank #1. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have soared 61.3% in the past year.
The Zacks Consensus Estimate for Ecolab current-year earnings is pegged at $6.43 per share, indicating a year-over-year rise of 23.4%. ECL, a Zacks Rank #1 stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 1.7%. The company’s shares have rallied roughly 37.3% in the past year.
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U.S. Silica (SLCA) Closes TLB Repricing & $25M Loan Buyback
U.S. Silica Holdings, Inc. (SLCA - Free Report) recently declared that it has completed the repricing of its seven-year $950 million senior secured Term Loan B (TLB) due Mar 23, 2030.
The repricing was completed at the tight end of guidance at 99.75, lowering the interest rate margin applicable to the TLB by 75 basis points from 4.75% with a floor of 50 basis points to 4.00% with a floor of 50 basis points for SOFR term loans. Furthermore, the repricing removed the 10 basis point Term SOFR Adjustment for term loans and lowered the soft call period from 12 to six months.
In addition to the repricing transaction, SLCA made a $25 million voluntary term loan principal repayment. The debt was extinguished at par with cash on hand. In the last seven quarters, U.S. Silica has repurchased $359 million in debt, cutting its debt payment expenses in today's high interest rate environment.
U.S. Silica's continued strong performance and strategic measures to decrease debt, strengthen its balance sheet and improve its leverage profile are significant.
The stock has lost 6.1% over the past six months against a 5.1% rise of its industry.
Image Source: Zacks Investment Research
SLCA, on its fourth-quarter call, said that the oil and gas sector is experiencing a multi-year growth phase. Favorable commodity prices and improved efficiencies in well completion pave the way for an active environment in the forthcoming years, with the company’s sand production capacity secured by strong contractual commitments for the current year.
U.S. Silica maintains its key emphasis on generating operational cash flow and lowering leverage on the balance sheet. The company foresees significant operating cash flow in 2024, allocating around $60 million in capital expenditures for the year.
U.S. Silica Holdings, Inc. Price and Consensus
U.S. Silica Holdings, Inc. price-consensus-chart | U.S. Silica Holdings, Inc. Quote
Zacks Rank & Key Picks
U.S. Silica currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Denison Mines Corp. (DNN - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Ecolab Inc. (ECL - Free Report) .
Denison Mines sports a Zacks Rank #1 (Strong Buy). DNN beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 300%. The company’s shares have soared 91.6% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology currently carries a Zacks Rank #1. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have soared 61.3% in the past year.
The Zacks Consensus Estimate for Ecolab current-year earnings is pegged at $6.43 per share, indicating a year-over-year rise of 23.4%. ECL, a Zacks Rank #1 stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 1.7%. The company’s shares have rallied roughly 37.3% in the past year.