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TriMas (TRS) Completes Senior Notes Offering Worth $300M

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TriMas Corporation (TRS - Free Report) announced the completion of its offering of $300-million senior notes, with an interest rate of 4.8755%, due 2025. The action is likely to boost the financial flexibility of the Bloomfield Hills, MI-based engineered and applied products maker.

Utilization of Proceeds

On Sep 11, TriMas initiated the offering of $300 million in aggregate principal of senior unsecured notes. The company plans to use the net proceeds from the notes to repay all outstanding obligations of its Term Loan A facility, repay a portion of outstanding obligations under accounts receivable facility, and pay fees and expenses related to the refinancing.

TriMas also amended its senior secured credit agreement to reflect revolving loan commitments of $300 million and extend the maturity to September 2022. The existing rate on the revolving loan remains the same, bearing a current interest rate of LIBOR plus 1.625%.

Incessant De-leveraging

TriMas continues to focus on cash generation and related de-leveraging. As of the second quarter, the company had net debt of $323.8 million. The company had reduced net debt by $58.8 million compared with the last year.

Notably, TriMas ended the quarter with ample liquidity and leverage ratio of 2.3x compared with 2.5x as of the first-quarter end. The company has a target of achieving leverage ratio of less than 2x. Adjusted free cash flow was approximately 144% of net income and 131% of net income for the second quarter.

Moreover, focus and attention on cash flow conversion is a key component of TriMas’ business model, and is likely to drive value for shareholders. In addition, investment in product and process innovation, along with capabilities, remains the utmost priority.

Price Movement

Over the past year, TriMas outperformed the industry it belongs to. The stock has gained 46.5%, while the industry recorded growth of 30.9%.

Zacks Rank & Stocks to Consider

Currently, TriMas carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the sector include AGCO Corporation (AGCO - Free Report) , Terex Corporation (TEX - Free Report) and EnPro Industries, Inc. (NPO - Free Report) . All three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AGCO has an expected long-term earnings growth rate of 13.5%.

Terex has an expected long-term earnings growth rate of 19.7%.

EnPro Industries has an expected long-term earnings growth rate of 15.9%.

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