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Koppers Holdings Inc. KOP, an integrated global manufacturer of treated wood products, wood treatment chemicals and carbon compounds, said that it has completed the repricing of its seven-year $495 million senior secured Term Loan B ("TLB") due April 10, 2030.
This transaction lowers the TLB's interest rate margins by 50 basis points, from 3% with a 50 basis point floor to 2.5% with a 50 basis point floor at the adjusted Term SOFR Rate or adjusted Daily Simple SOFR.
This deal is consistent with Koppers' continued efforts to optimize its capital structure, allowing it to lower interest expenses through repricing while maintaining its leverage, covenants, and maturity date.
Wells Fargo Bank, National Association acts as the TLB's administrative agent. Wells Fargo Securities, LLC, PNC Capital Markets LLC, BofA Securities, Inc., Fifth Third Bank, National Association, Citizens Bank, N.A., and Truist Securities, Inc. are serving as joint lead arrangers and bookrunners for TLB.
Koppers’ shares have lost 37.2% in the past year against the Zacks Chemicals Diversified industry’s 8.8% decline.
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Koppers anticipates sales for 2024 to be roughly $2.1 billion, factoring in the current competitive landscape, global economic conditions and the prevailing uncertainty associated with geopolitical and supply chain challenges. It expects adjusted EBITDA to be in the band of $270-$275 million for the year, including the acquisition of Brown Wood, which was completed on April 1, 2024. Koppers projects adjusted earnings per share to be $4.25-$4.45 for 2024. It expects capital expenditures of roughly $80 million for this year. It estimates operating cash flows of $100-$125 million for 2024, barring any impact from pension termination.
Koppers Holdings Inc. Price and Consensus
Koppers Holdings Inc. price-consensus-chart | Koppers Holdings Inc. Quote
KOP’s Rank & Key Picks
KOP currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Carpenter Technology Corporation CRS, New Gold Inc. NGD and CF Industries Inc. CF.
Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.1%. The company's shares have soared 138.9% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.
New Gold, a Zacks Rank #2 (Buy) stock, beat the consensus estimate in three of the trailing four quarters. In this time frame, it has delivered an earnings surprise of roughly 37.5%, on average. NGD’s shares have gained 65.8% over the past year.
The Zacks Consensus Estimate for CF’s current-year earnings is pegged at $6.35. CF, a Zacks Rank #1 stock, beat the consensus estimate in two of the last four quarters while missed twice, with the average earnings surprise being 10.3%. CF has rallied around 7.8% in the past year.