HSC Harsco Corporation

Harsco Corporation (HSC) recently announced that it has renewed an unsecured 5-year back-up credit facility of $525 million. This was done engaging a multi-national consortium of 14 banks, co-led by Citibank and Royal Bank of Scotland on account of the company’s 3-year back-up facility which is due for expiry later this year.

Harsco has always been engaged in implementing important bank credit facilities and commercial paper programs to meet its periodic cash targets and requirements. As per December 31, 2011, the company had a total of $1,364.2 million international facility limit available.

Management is quite appeased with the fact that the international lending community retains its confidence in the functioning of Harsco over the long term. This ossifies the company’s stability aspect, allowing it to have the leverage of not being constantly solicitous of its financial needs and cater to attaining long-term goals instead.

Harsco currently awaits the appointment of its Chairman, CEO and President following the resignation of Salvatore D. Fazzolari on February 24, 2012. Meanwhile, Henry W. Knueppel shall continue to serve as the interim Chairman and CEO of Harsco.

The company should remain wary of its competitors’ moves in the industry. Recently, TMS International Corporation (TMS) announced that it has received two new steel mill service contracts worth $179 million. Such progressive advances of its peers can prove ominous to Harsco’s existing market share. Other formidable players in the industry are W.W. Grainger, Inc. (GWW) and Hudson Technologies, Inc. (HDSN).

Our Zacks Consensus Estimate currently projects an EPS of 4 cents per share and $1.57 per share for the first quarter and full year 2012, respectively. We continue to maintain a Neutral recommendation on Harsco. In the short run, our view is supported by a Zacks #3 Rank on the stock which translates into a short-term rating of Hold.

 
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