AIR Completes Sale of Notes - Analyst Blog
January 24 2012 - 7:30AM
Zacks
Recently, AAR
Corp. (AIR) announced completion of its previously
announced sale of $175,000,000 of its 7.25% senior unsecured notes
due 2022. The Notes were sold at a price equal to 98.268% of
the principal amount, for a yield to maturity of 7.50%.
The company has planned to use the
proceeds of the offering to repay a portion of the borrowings
incurred under the revolving credit agreement toward purchase of
Telair International and Nordisk Aviation, back on December 2,
2011. The proceeds are expected to pay fees and expenses of the
offering as well.
The Notes are senior obligations of
AAR Corp.; guaranteed by the company’s existing domestic
subsidiaries. The company ,which operates in a highly capital
intensive industry, is highly dependant on the continuing
availability of debt and equity capital. In such a scenario,
regular issuance of secured, unsecured notes by the
company--representing its ability to finance the debt liabilities
on favorable terms, appear impressive.
Earlier this month, the company
declared a quarterly cash dividend of $0.075 per share to its
stockholders. The dividend will be paid on February 13, 2012 to
stockholders of record as of the close of business on January 30,
2012.
AAR Corp. is a leading provider of
products and value-added services to the worldwide aerospace and
government and defense industries. With facilities and sales
locations around the world, AAR uses its close-to-the-customer
business model to serve customers through four operating segments:
Aviation Supply Chain; Government and Defense Services;
Maintenance, Repair and Overhaul; and Structures and Systems.
Over time, the company has been
winning a number of significant contracts for providing value-added
solutions to the U.S. army and navy. In addition, the company is
offering defense and nation building initiatives of other foreign
governments. We believe that the company’s market expertise,
technical and financial capabilities will provide it with a strong
competitive advantage; and its commitment toward returning
shareholder value will help maintain a satisfactory position in the
industry.
The company competes directly with
its peers such as Goodrich Corp (GR),
Boeing Co (BA), Lockheed Martin
Corporation (LMT). We currently hold a Neutral
recommendation on the stock. AIR has a Zacks #3 Rank, implying a
short-term (1-3 months) Hold rating.
AAR CORP (AIR): Free Stock Analysis Report
BOEING CO (BA): Free Stock Analysis Report
GOODRICH CORP (GR): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis Report
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