Ashland's (ASH) Subsidiary Announces Senior Notes Offering

Ashland Global Holdings Inc.’s (NYSE:ASH) fully-owned subsidiary, Ashland Services B.V, announced its plan to offer €500 million (roughly $560 million) total principal amount of senior euro-denominated notes.

The notes will be treated as senior unsecured obligations of Ashland Services B.V. Notably, the notes will be guaranteed initially by each of Ashland and Ashland LLC, a fully-owned subsidiary of Ashland, on an unsecured basis.

Ashland plans to use the net proceeds from the senior notes offering along with the proceeds from Ashland’s delayed draw Term Loan A facility and other funds of Ashland LLC or its subsidiaries to purchase in cash tender offers, part of Ashland LLC’s outstanding 4.75% senior notes (having a purchase price of up to $575 million) slated to mature in 2022.

It also comprises the purchase of Hercules LLC’s outstanding 6.6% Debentures slated to mature in 2027, Ashland LLC’s outstanding 6.875% senior notes slated to mature in 2043 and Hercules LLC’s outstanding 6.500% junior subordinated debentures slated to mature in 2029, having a total purchase price of up to $250 million. This is subject to the order of priority and proration provisions, and other offer terms set forth by Ashland.

Notably, the offering of the notes is not subject to the completion of the tender offers.

Shares of Ashland have gained 13.7% in the past year compared with the industry’s 2.8% growth.

In November 2019, the company stated that it expects demand dynamics in first-quarter fiscal 2020 to be similar to that in the fiscal fourth quarter. Ashland sees limited improvement in Oral Care and Pharmachem businesses in the near term. The company expects pricing and raw material price movements to remain balanced. Moreover, the temporary shutdown of the Nanjing plant is expected to affect its performance in the fiscal first quarter.

Ashland completed its cost-reduction program. The company reduced costs by $115 million on a run-rate basis as of Sep 30, 2019. It envisions the carryover impact from the program in fiscal 2020 to be nearly $25 million of selling, general and administrative cost savings.

Ashland Global Holdings Inc. Price and Consensus

Zacks Rank & Stocks to Consider

Ashland currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the basic materials space are Daqo New Energy Corp. (NYSE:DQ) , Pan American Silver Corp. (NASDAQ:PAAS) and Sibanye Gold Limited (NYSE:SBGL) .

Daqo New Energy has projected earnings growth rate of 294.7% for 2020. The company’s shares have rallied 104.6% in a year. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pan American Silver has an estimated earnings growth rate of 38.1% for 2020. It currently flaunts a Zacks Rank #1. The company’s shares have gained 55.3% in a year.

Sibanye Gold has a projected earnings growth rate of 587.5% for 2020 and a Zacks Rank #2 (Buy) at present. The company’s shares have soared 247.7% in a year.

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