Cintas Sells Notes in 2 Tranches - Analyst Blog
May 19 2011 - 10:43AM
Zacks
Cintas Corporation (CTAS) recently sold $500
million of senior notes in two equal tranches and appointed
KeyCorp (KEY) and JPMorgan Chase &
Co. (JPM) as the joint book running managers for the
sale.
In the first tranche, the company sold $250 million non-callable
senior notes, having a coupon rate of 2.85% and a yield of 2.851%,
maturing on June 1, 2016. The notes are issued at a price of
$99.995 and the first pay out will commence on December 1, 2011,
which will be semi-annual. The issue has Moody’s A2 rating while
S&P has rendered BBB+. The spread is 100 basis points more than
government notes.
In the second tranche, the company sold $250 million
non-callable senior notes, having a coupon rate of 4.30% and a
yield of 4.326%, maturing on June 1, 2021. The notes are issued at
a price of $99.789 and the first pay out will commence from
December 1, 2011, which will be semi-annual.
The issue has Moody’s A2 rating while S&P has rendered BBB+.
The spread is 115 basis points more than government notes. The date
of settlement for both the tranches is May 23, 2011.
The company recently announced fiscal third quarter results
delivering an EPS of 41 cents surpassing the Zacks Consensus
Estimate of 36 cents and 32 cents reported during the prior-year
quarter. Total revenue also increased 8.8% y/y to $937.8 million in
the reported quarter, outperforming the Zacks Consensus Estimate of
$909 million.
Cintas’ reported cash and marketable securities were $216.7
million as of February 28, 2011 compared with $566.1 million as of
May 31, 2011. Current ratio of the company was 3.4:1.
Debt-to-capitalization ratio was 24.6% as of February 28, 2011,
24.7% as of November and 24.2% as of August 31, 2011.
Cincinnati, Ohio-based Cintas Corporation designs, manufactures
and implements corporate identity uniform programs, and provides
entrance mats, restroom supplies, promotional products, and first
aid and safety products for approximately 800,000 businesses.
Cintas competes with G&K Services Inc.
(GKSR) and privately held Alsco Inc. and ARAMARK Corporation.
Cintas currently retains a Zacks #3 Rank (short-term Hold
rating).
CINTAS CORP (CTAS): Free Stock Analysis Report
G&K SVCS A (GKSR): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
KEYCORP NEW (KEY): Free Stock Analysis Report
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