Moody's Investors Service has cut its overall debt rating for Noranda Aluminum Holding to Caa1 from B3 — that translates to "poor and subject to very high credit risk" from "speculative and high risk" — and changed its outlook for the Franklin-based company to negative from stable. Analysts Carol Cowan and Brian Oak write that Noranda will see prices for its products continue to fall for the next several quarters even as some of its operating costs climb. They say there are a lot of hurdles to overcome for Noranda and don't expect to revisit their rating for at least a year.
The negative outlook incorporates our expectation that metrics will deteriorate further in the second half of 2015 and into 2016 as the company's operating results are impacted by the falling aluminum prices and premiums. It also captures the possibility that, given the weak market fundamentals, aluminum pricing will remain suppressed over the intermediate term. The outlook also reflects the uncertainty that Noranda is able to successfully improve the reliability of its smelter operations, achieve its stated cost objectives, and complete its remaining capital projects while maintaining adequate liquidity.
The directors of Ryman Hospitality Properties have voted to set up a share repurchase program for up to $100 million. The plan, which will expire at the end of 2016, will use available cash and borrowings under Ryman’s revolving credit line. The company is not required to buy a particular amount of stock.
Chairman and CEO Colin Reed said the buyback is “part of a capital allocation strategy that we believe is in the best interest of our shareholders and our business. We believe using capital to repurchase our shares at appropriate prices represents a favorable strategic use of capital.”
Shares of Ryman (Ticker: RHP) fell about 1 percent Thursday — before the buyback news — to $52.16. So far in 2015, they’re down slightly.
Executives at Nashville-based Emdeon say they plan to issue $250 million of debt to help fund their planned $910 million acquisition of Altegra Health. The six-year notes are being marketed via a private offering. Florida-based Altegra markets analytics and risk management services to insurers and in the past 12 months rang up adjusted EBITDA of $59 million on revenues of $212 million. Adding it to Emdeon will grow the company's annual sales to $1.6 billion.
Pinnacle Financial Partners executives plan to issue $60 million in debt to help fund their planned acquisitions of CapitalMark Bank & Trust and Magna Bank and redeem their loan with US Bank. The notes, which were priced this morning in a combo fixed-variable setup, will mature in 10 years.
Corrections Corp. of America executives this week amended their main revolving debt facility, extending its maturity date by two and a half years to mid-2020 and lowering by 25 basis points the margin on its base rate and LIBOR rate loans, among other things. The amendment also boosts the company's "accordion" feature by $250 million to $350 million. CCA shares (Ticker: CXW) are up slightly this morning to $34.66. Year to date, they've slipped about 5 percent.
The directors of LifePoint Health earlier this month voted to set up a $150 million stock buyback plan that triples the hospital company's remaining repurchase capacity.
The new plan is valid for 18 months and piggybacks onto an existing $150 million plan that will expire Oct. 1. About half of that dollar amount had been used as of early this month.
In the first quarter of this year, the company bought back almost $34 million of its own shares (Ticker: LPNT), which have risen 4 percent so far this year. The $225 million still available for repurchases amounts to almost 7 percent of the company's shares outstanding.
HCA Holdings' finance team has saved the company a few dollars by renegotiating two big loans with a group of lenders led by Bank of America. The Nashville-based hospital giant (Ticker: HCA) has replaced a $482 million term loan that would have expired next May and a $717 million facility due next February with a single $1.4 billion credit line that will mature in mid-2020. The new facility also comes with a lower interest rate.
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