Kronos Worldwide (KRO) To Offer Senior Notes To Repay Debt

Kronos Worldwide, Inc. (NYSE:KRO) recently announced plans to offer €400 million in total principal amount of senior secured notes due 2025 in a private offering, subject to market conditions.

The notes will be issued by the company’s fully-owned subsidiary, Kronos International, Inc., and will be guaranteed on a senior secured basis. The notes are expected to be eligible for resale to non U.S. persons (under Regulation S) and qualified institutional buyers (under Rule 144A).

Kronos Worldwide plans to use the net proceeds from the offering to prepay the outstanding balance of its existing term loan debt worth $338.6 million and also pay off all outstanding debt under its North American credit revolving facility. The remaining balance amount from the notes offering will be kept for general corporate purposes.

Price Performance

Shares of Kronos Worldwide have moved up 13.7% in the last three months, significantly outperforming the industry’s 5.4% gain.

Q2 Performance & Outlook

Kronos Worldwide, in second-quarter 2017, witnessed higher income from operations resulting from favorable impacts of improved selling prices, increased sales and production volumes and reduced raw materials and other production costs.

The company, in second-quarter 2017 earnings, announced that it expects the production volumes to be higher in 2017 on a year-over-year basis. The company believes that production rates this year will be favorably impacted by the implementation of certain productivity-enhancing improvement projects at some facilities. The company witnessed strong sales volumes during first-half 2017. It is witnessing robust demand for titanium dioxide (TiO2) products in some of its key markets.

Kronos Worldwide also expects income from operations in 2017 will be higher on a year-over-year basis, mainly due to an expected increase in average selling prices and the favorable impact of anticipated higher production volumes in 2017.

Kronos Worldwide currently sports a Zacks Rank #1 (Strong Buy).

Other Stocks to Consider

Some other top-ranked stocks in the basic materials space are The Chemours Company (NYSE:CC) , Tosoh Corporation TOSCF and Air Liquide (OTC:AIQUY) . You can see the complete list of today’s Zacks Rank #1 stocks here.

Chemours has expected long-term earnings growth rate of 15.5%.

Tosoh has expected long-term earnings growth rate of 10%.

Air Liquide has expected long-term earnings growth rate of 8.1%.

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