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Molson Coors (TAP) Prices Senior Notes to Repay Term Loan

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Global brewer Molson Coors Brewing Company (TAP - Free Report) has recently priced its previously announced senior notes worth $1 billion, consisting of $500 million principal amount of 1.90% Senior Notes due 2019 and $500 million principal amount of 2.25% Senior Notes due 2020.

The offering is expected to close on Mar 15. Molson Coors is likely to use the proceeds to partially repay the outstanding term loan facility. After deducting discounts and commissions and estimated offering expenses, Molson Coors expects to receive net proceeds from the offering of approximately $1.0 billion.

At the end of fourth-quarter 2016, total debt was $12.1 billion, and cash and cash equivalents totaled $560.9 million, resulting in net debt of $11.512 billion. Total debt reflects transaction-related debt and approximately $200 million of debt pay-down near the end of the year 2017.

Denver-based Molson Coors delivered weaker-than-expected fourth-quarter 2016 results last month. Adjusted earnings of 46 cents were way below the Zacks Consensus Estimate of 88 cents by 47.7% but increased 17.9% from the prior-year earnings of 39 cents per share, on the back of higher income in the U.S. and improved performance in International segment, partially offset by the indirect tax provision in Europe.

Net sales, including excise tax, declined 4.2% year over year to $2.47 billion in the fourth quarter and also lagged the Zacks Consensus Estimate by 3.9%. Sales declined in the regions of Canada and Europe. However, sales in the International regions improved, driven by the acquisition of the Miller global brands. Currency had a negative impact of $53.0 million on overall sales in the quarter. On a constant currency basis, sales dropped 2.2%.

Molson Coors Brewing Company Price, Consensus and EPS Surprise

 

Molson Coors Brewing Company Price, Consensus and EPS Surprise | Molson Coors Brewing Company Quote

Molson Coors’ shares have increased 11.1% compared with the Zacks categorized Beverages-Alcohol industry’s growth of 4.3% over the past one year. Notably, the industry is part of the top 19% of the Zacks Classified industries (49 out of the 265).

Zacks Rank and Key Picks

Molson Coors currently carries a Zacks Rank #3 (Hold).

Some better-ranked food stocks in the industry include Lamb Weston Holdings Inc. (LW - Free Report) , ConAgra Foods, Inc. (CAG - Free Report) and Ingredion, Inc. (INGR - Free Report) .

Lamb Weston has long-term earnings growth rate of 3.24% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ConAgra Foods and Ingredion, both carrying a Zacks Rank #2 (Buy), have growth rates of 8.00% and 11.00%, respectively.

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