Leucadia National Corporation (LUK) recently priced $750 million worth of Senior Notes, which are due to expire on Oct 18, 2023. Each note has been offered to the public at 98.641% of its face value.
These senior notes are unsecured fixed rate notes and carry a coupon rate of 5.5%. Interest will be paid semi-annually on Apr 18 and Oct 18. The first interest installment will commence from Apr 18, 2014. These notes are expected to yield 2.730% on maturity.
The offering is anticipated to contribute roughly $736.4 million, before expenses, to Leucadia. Net proceeds from the issuance are expected to be used by the company for the repayment, repurchase and/or redemption of 8.125% senior notes maturing in 2015 as well as for general corporate purposes.
Leucadia’s senior unsecured notes issuance has been rated Ba2 (Stable) by Moody's Investors Service while ratings of ‘BBB (Stable)’ and ‘BBB- (Stable)’ are expected from Standard & Poor's and Fitch Ratings, respectively.
The offering will consummate on Oct 18, 2013.
Exiting the second quarter 2013, long-term debt balance of Leucadia stood at $7,559.5 million, down 2.6% sequentially. Interest paid during the quarter totaled $21.2 million, roughly flat year over year. Increase in debt levels will increase the company’s financial obligations further in the quarters ahead.
Leucadia is engaged in beef processing, manufacturing, gaming entertainment, real estate activities, medical product development operations and various other investment-related activities in the United States.
Others companies to watch out for in the industry are Marubeni Corporation (MARUY) with a Zacks Rank #1 (Strong Buy) while 3M Company (MMM) and Honeywell International Inc. (HON), each hold a Zacks Rank #2 (Buy).
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