Terex Announces $600 Million Debt Tender As Credit Line Amended

Date : 10/05/2010 @ 3:35PM
Source : Dow Jones News
Stock : Bucyrus International, Inc. (MM) (BUCY)
Quote : 92.0  0.0 (0.00%) @ 2:05AM

Terex Announces $600 Million Debt Tender As Credit Line Amended

Terex (NYSE:TEX)
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Terex Corp. (TEX) announced plans to repurchase up to $600 million of debt as it reached a deal with creditors allowing it to do so.

The construction-machinery maker also said it will prepay about $270 million of loans under the credit facility with a portion of the proceeds from the sale of its mining business.

Other proceeds from that sale will go to pay face value for up to $300 million each of 7 3/8% notes due 2014 and 10 7/8% notes due 2016. The company didn't say how much of the debt is outstanding and a spokesman wasn't immediately available for comment.

Terex, which makes hydraulic excavators and tower cranes, sold its mining unit to Bucyrus International Inc. (BUCY) in February for $1 billion plus stock. If that money isn't used by early next year to purchase businesses, Terex's lenders have requested it go toward debt reduction.

The company said the new amendment removes the previous $200 million annual limitation on acquisitions and offers added flexibility in other restrictive covenants.

Last month, President and Chief Operating Officer Thomas Riordan said Terex is looking to buy public or private companies with annual sales between $500 million and $1 billion that don't depend on rental firms for distribution. Unlike most of its competitors, Terex lacks a network of independent retail dealers to buy and distribute its equipment. Instead, it sells most of its machinery to equipment-rental companies.

In July, the company reported its second-quarter loss narrowed as it benefited from improved order activity across most product categories, although its cranes business continued to suffer.

Shares recently traded at $24, up 4.4%, amid a general market rally. The stock is up 21% this year.

-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357; Kathy.Shwiff@dowjones.com

 
 

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