Chemours set to raise new debt
On May 22, Chemours (CC) announced the pricing of its public offering of 450 million euros. The senior notes are due 2026. The senior notes carry a coupon rate of 4.0% to be priced at 100% of the principal amount. The offer is set to close on June 6—subject to customary closing conditions.
Chemours intends to use the net proceeds received from the issue along with cash in hand to redeem bonds carrying higher coupon rates. Chemours will redeem up to $250 million 6.6% senior notes due in 2023 and the remaining 6.1% euro senior notes due in 2023. As a result of the refinancing, Chemours’ interest expense could decline by $10 million–$13 million. After equating for redemptions, Chemours’ debt position might be reduced marginally to $4.1 billion by the end of the second quarter.
Update on Chemours’ stock price
Chemours stock declined 2.9% and closed at $50.66 for the week ending May 25. Despite a decline in the stock price, Chemours traded 0.9% above the 100-day moving average price of $50.19. On a year-to-date basis, the stock has gained 1.2%. Analysts appear to be bullish on the stock and have recommended a target price of $62.85, which implies a return potential of 24.1%. Chemours’ 14-day relative strength index of 48 indicates that the stock isn’t overbought or oversold.
Chemours underperformed the PowerShares S&P Spin-Off Portfolio (CSD), which declined 1.0% for the week. CSD has invested 3.6% of its portfolio in Chemours. CSD also provides exposure to Synchrony Financial (SYF), PayPal Holdings (PYPL), and Fortive (FTV) with weights of 7.9%, 7.9%, and 7.5%, respectively, as of May 25.