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LyondellBasell's Subsidiary Prices Public Offering of Notes

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LyondellBasell Industries N.V.’s (LYB - Free Report) fully-owned subsidiary, LYB International Finance III, LLC, priced a public offering of $500 million total principal amount of 2.875% guaranteed notes slated to mature in 2025, $500 million total principal amount of 3.375% guaranteed notes slated to mature in 2030 and $1 billion total principal amount of 4.2% guaranteed notes slated to mature in 2050.

Notably, the notes will be wholly and unconditionally guaranteed by LyondellBasell. Further, the company anticipates the offering to close on Apr 20, which is subject to customary closing conditions.

LyondellBasell intends to use the net proceeds from the offering for general corporate purposes, which include increasing liquidity and managing short-term debt maturities.

BofA Securities, Inc., J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC are serving as the joint book-running managers for the offering. Notably, the offering is made in accordance with an effective shelf registration statement, which was earlier filed with the Securities and Exchange Commission.

Shares of LyondellBasell have lost 46.1% in the past year compared with the industry’s 41.4% decline.

 

 

Recently, the company issued an operational update and estimated financial results for the first quarter of 2020.

LyondellBasell projects net income of $110-$180 million for the first quarter of 2020. EBITDA is expected between $610 million and $680 million.

Global markets for the company's products are impacted due to the ongoing coronavirus pandemic and the considerable drop in oil prices. At present, its major global manufacturing facilities are operational.

The company has temporarily idled production at a number of small plants in the Advanced Polymer Solutions unit. It also stated that volumes and margins in the Refining unit, and Oxyfuels & Related Products business are affected by lower oil prices as well as reduced demand for transportation fuels. This is likely to impact the company’s second-quarter results.

LyondellBasell is postponing selected growth projects and planned maintenance to reduce financial and operational risk. The moves are expected to reduce the company’s 2020 capital expenditure by roughly 20% to $1.9 billion from the earlier mentioned $2.4 billion.

As of Mar 31, LyondellBasell had an aggregate debt of $13.7 billion, with available liquidity of $3.2 billion, which included cash and short-term investments worth $1.8 billion.

LyondellBasell Industries N.V. Price and Consensus

 

LyondellBasell Industries N.V. Price and Consensus

LyondellBasell Industries N.V. price-consensus-chart | LyondellBasell Industries N.V. Quote

Zacks Rank & Stocks to Consider

LyondellBasell currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the basic materials space are Kinross Gold Corporation (KGC - Free Report) , Franco-Nevada Corporation (FNV - Free Report) and Barrick Gold Corporation (GOLD - Free Report) .

Kinross has a projected earnings growth rate of 41.2% for 2020. The company’s shares have surged 90.1% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Franco-Nevada has a projected earnings growth rate of 15.9% for 2020. It currently carries a Zacks Rank #2 (Buy). The company’s shares have rallied 74.4% in a year.

Barrick Gold currently has a Zacks Rank #2 and a projected earnings growth rate of 45.1% for 2020. The company’s shares have gained 89.1% in a year.

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