Praxair's 2nd Notes Issue in Feb - Analyst Blog

Praxair Inc. (PX) recently priced $500 million worth of notes; this being the second issue in the month of February, 2013. These notes, offered under the company’s universal shelf registration statement, carry a 1.20% interest rate and fall due on March 4, 2018.

The offer price for these notes has been fixed at 99.874% of principal amount plus accrued interest, if any. Yield to maturity is expected to come around 1.226%. Interest will be paid semi-annually on March 4 and September 4. The first installment falls due on September 4, 2013.

The offering will consummate on March 4, 2013.

Praxair intends to use the proceeds from the issuance, likely to approximate $497.5 million, for repaying short-term debt and for general corporate purposes. Prior to this issue, the industrial gas producer and supplier had raised funds from the market amounting to $900 million in  February 2013, $700 million in November 2012, $500 million in August 2012 and $600 million in February 2012 through issuance of notes.

Exiting 2012, Praxair’s long-term debt balance stood at $6,685.0 million, up 4.6% sequentially. Interest paid during the year totaled $141 million. Rising debt burden will increase the company’s financial obligations all the more in the quarters ahead.

The current Zacks Consensus Estimate for the first quarter of 2013 is $1.39, representing a year-over-year increase of 0.4%. Estimates for years 2013 and 2014 are $6.00 and $6.80, reflecting annual growth of 7.8% and 13.4%, respectively.

The stock currently carries a Zacks Rank #3 (Hold). Other stocks to watch out for in the industry are Arkema S.A. (ARKAY), BASF SE (BASFY) and PetroLogistics (PDH), each with a Zacks Rank #1 (Strong Buy).
 

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