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Steel Dynamics Completes Sale of $350M Senior Notes Due 2025

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Steel Dynamics, Inc. (STLD - Free Report) announced the completion of the sale of $350 million total principal amount of its 4.125% Senior Notes due 2025. The move is aimed at reducing the company’s interest expense and extend its debt maturity profile.

The senior notes were offered to persons outside the United States (under Regulation S) and qualified institutional buyers (under Rule 144A) in a private offering, which is exempted from registration requirements per the Securities Act of 1933.

According to Steel Dynamics, the company will use the net proceeds from this offering along with cash in hand to purchase all of its 6.375% senior notes due 2022 that are validly tendered. It will also repurchase, redeem or discharge any 2022 notes not purchased earlier and pay related fees and expenses.

Shares of Steel Dynamics have moved up 3% in the last three months, significantly underperforming the industry’s 21.5% rally.


Steel Dynamics reported net income of $154 million or 63 cents per share in second-quarter 2017, compared to net income of $142 million or 58 cents recorded a year ago. The figure missed the Zacks Consensus Estimate of 65 cents.

Net sales in the quarter increased 18.1% year over year to $2,390.7 million, beating the Zacks Consensus Estimate of $2,344 million.

Steel Dynamics, during second-quarter earnings, provided optimistic views on macroeconomic and market conditions, which is anticipated to benefit steel consumption in domestic market in the future. The company believes that demand in the North American automotive steel market will remain steady although automotive production in the United States has peaked. It is also expecting growth in construction and energy sectors, especially for infrastructure projects in the public sector.

Steel Dynamics continues to generate robust cash flows and strengthen financial position. The company is well poised for growth and to deliver shareholder value through strategic and organic growth opportunities.

Steel Dynamics, Inc. Price and Consensus


Steel Dynamics, Inc. Price and Consensus | Steel Dynamics, Inc. Quote

Steel Dynamics currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks in the basic materials space are Arkema S.A. (ARKAY - Free Report) , Akzo Nobel N.V. (AKZOY - Free Report) and Kronos Worldwide Inc. (KRO - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Arkema has an expected long-term earnings growth rate of 12.8%.

Akzo Nobelhas an expected long-term earnings growth rate of 11.1%.

Kronos Worldwide has an expected long-term earnings growth rate of 5%.

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