Vulcan Completes Bond Issuance - Analyst Blog
June 17 2011 - 6:45AM
Zacks
Vulcan Materials Company (VMC) recently
announced the completion of its $1.1 billion bond issuance, which
has received orders worth $3.2 billion. The company reported
that the bond issuance was undertaken to reduce its debt that is
due over the next several years.
Vulcan Materials intends to use a part of the proceeds from the
issuance to buy $275 million in senior unsecured notes due 2012 and
2013. It also plans to prepay a $450 million term loan due 2015 and
reduce debt borrowed against its revolving credit facility.
However, the company will have to incur a pre-tax charge of about
$26.5 million in the second quarter related to the use of proceeds
from the bonds.
Vulcan Materials also entered into an agreement with a
consortium of banks to change the fixed rate of interest to
floating rates on $500 million in notes due 2016.
During the first quarter of 2011, Vulcan Materials reported a
net loss of 62 cents per share from continuing operations,
deteriorating sharply from last year’s net loss of 53 cents per
share from continuing operations. Total revenue dropped
marginally to $487.2 million from $493.3 million in the
corresponding quarter of 2010. The year-over-year decline was
primarily attributable to a decline in shipments in South Carolina,
Florida and regions along the Gulf Coast, despite a stronger demand
from public infrastructure projects in Tennessee, Virginia and
Georgia.
Vulcan Materials’ cash and cash equivalents improved to $63.2
million as of March 31, 2011 from $36 million at the end of the
prior-year period. However, long-term debt rose to $2.43 billion as
of the above date from $2.10 billion a year ago.
Based in Birmingham, Alabama, Vulcan Materials Corp. is engaged
in the production, distribution and sale of construction
aggregates, and other construction materials and related services
in the U.S. and Mexico. It is the nation’s largest producer of
construction aggregates and a leading producer of other
construction materials. Its key competitors include Cemex
S.A.B. de C.V. (CX), Lafarge S.A. (LFRGY)
and Martin Marietta Materials Inc. (MLM).
Vulcan Materials retains a Zacks #3 Rank, which translates into
a short-term (1 to 3 months) Hold rating.
CEMEX SA ADR (CX): Free Stock Analysis Report
LAFARGE SA-ADR (LFRGY): Free Stock Analysis Report
MARTIN MRT-MATL (MLM): Free Stock Analysis Report
VULCAN MATLS CO (VMC): Free Stock Analysis Report
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