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Berry Global (BERY) Prices Senior Notes in Private Offering
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Berry Global Group, Inc. (BERY - Free Report) recently announced the pricing of $800 million principal amount of first priority senior secured notes due 2031 in a private placement. The sale of the notes is expected to close on or around May 28, 2024, by the company’s wholly-owned subsidiary, Berry Global, Inc.
The company’s shares lost 0.3% yesterday, ending the trading session at $59.70.
Inside the Headlines
The notes will be offered only to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended and to non-U.S. investors conforming to Regulation S. Interest on the senior notes has been set at 5.800% and will be paid out semi-annually — in cash in arrears — on Jun 15 and Dec 15 of every year. The first interest payment will be made on Dec 15, 2024, while the maturity of the notes will occur on Jun 15, 2031.
Berry Global expects the net proceeds from this offering to be used to repurchase the issuer’s 4.875% first priority senior secured notes due 2026 and to meet certain fees and expenses associated with the offering. The remaining net proceeds will be used to meet general corporate purposes, including the prepayment of certain indebtedness.
We believe that the offering of senior notes will increase BERY’s debts and, in turn, might inflate its financial obligations and hurt profitability. However, prepaying part of certain indebtedness will offer some relief. Exiting second-quarter fiscal 2024 (ended March 2024), its current and long-term debt remained high at $8.71 billion.
Zacks Rank, Price Performance and Earnings Trend
BERY, with a $6.8 billion market capitalization, currently carries a Zacks Rank #3 (Hold). It stands to benefit from strategic investments in high-growth end markets, like food service and pharmaceuticals. However, weakness in its Consumer Packaging International segment due to softer consumer and industrial market demand remains a concern.
Image Source: Zacks Investment Research
Berry Global’s shares have gained 1.1% compared with 8.6% growth recorded by the industry in the past three months.
The Zacks Consensus Estimate for fiscal 2024 (ending September 2024) earnings has decreased 0.3% to $7.42 in the past 60 days.
3 Promising Stocks
Some better-ranked stocks from the same space are discussed below.
AMCR delivered a trailing four-quarter average earnings surprise of 8.1%. In the past 60 days, the Zacks Consensus Estimate for Amcor’s fiscal 2024 earnings has increased 1.5%.
AptarGroup, Inc. (ATR - Free Report) carries a Zacks Rank #2. ATR delivered a trailing four-quarter average earnings surprise of 9.3%. In the past 60 days, the Zacks Consensus Estimate for its 2024 earnings has risen 3.3%.
Greif, Inc. (GEF - Free Report) presently has a Zacks Rank of 2. GEF delivered a trailing four-quarter average earnings surprise of 150.6%. In the past 60 days, the Zacks Consensus Estimate for its fiscal 2024 earnings has improved 9%.
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Berry Global (BERY) Prices Senior Notes in Private Offering
Berry Global Group, Inc. (BERY - Free Report) recently announced the pricing of $800 million principal amount of first priority senior secured notes due 2031 in a private placement. The sale of the notes is expected to close on or around May 28, 2024, by the company’s wholly-owned subsidiary, Berry Global, Inc.
The company’s shares lost 0.3% yesterday, ending the trading session at $59.70.
Inside the Headlines
The notes will be offered only to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended and to non-U.S. investors conforming to Regulation S. Interest on the senior notes has been set at 5.800% and will be paid out semi-annually — in cash in arrears — on Jun 15 and Dec 15 of every year. The first interest payment will be made on Dec 15, 2024, while the maturity of the notes will occur on Jun 15, 2031.
Berry Global expects the net proceeds from this offering to be used to repurchase the issuer’s 4.875% first priority senior secured notes due 2026 and to meet certain fees and expenses associated with the offering. The remaining net proceeds will be used to meet general corporate purposes, including the prepayment of certain indebtedness.
We believe that the offering of senior notes will increase BERY’s debts and, in turn, might inflate its financial obligations and hurt profitability. However, prepaying part of certain indebtedness will offer some relief. Exiting second-quarter fiscal 2024 (ended March 2024), its current and long-term debt remained high at $8.71 billion.
Zacks Rank, Price Performance and Earnings Trend
BERY, with a $6.8 billion market capitalization, currently carries a Zacks Rank #3 (Hold). It stands to benefit from strategic investments in high-growth end markets, like food service and pharmaceuticals. However, weakness in its Consumer Packaging International segment due to softer consumer and industrial market demand remains a concern.
Image Source: Zacks Investment Research
Berry Global’s shares have gained 1.1% compared with 8.6% growth recorded by the industry in the past three months.
The Zacks Consensus Estimate for fiscal 2024 (ending September 2024) earnings has decreased 0.3% to $7.42 in the past 60 days.
3 Promising Stocks
Some better-ranked stocks from the same space are discussed below.
Amcor plc (AMCR - Free Report) carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMCR delivered a trailing four-quarter average earnings surprise of 8.1%. In the past 60 days, the Zacks Consensus Estimate for Amcor’s fiscal 2024 earnings has increased 1.5%.
AptarGroup, Inc. (ATR - Free Report) carries a Zacks Rank #2. ATR delivered a trailing four-quarter average earnings surprise of 9.3%. In the past 60 days, the Zacks Consensus Estimate for its 2024 earnings has risen 3.3%.
Greif, Inc. (GEF - Free Report) presently has a Zacks Rank of 2. GEF delivered a trailing four-quarter average earnings surprise of 150.6%. In the past 60 days, the Zacks Consensus Estimate for its fiscal 2024 earnings has improved 9%.