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Eastman Chemical Company (NYSE:EMN), a global specialty materials company with a market capitalization of $11.37 billion and a "GOOD" financial health rating according to InvestingPro, announced on Monday the issuance of $250 million in aggregate principal amount of 5.000% notes due 2029, adding to the $500 million notes issued previously on August 1, 2024. This public offering, which was conducted under an existing registration statement, contributes to a single series of notes maturing on August 1, 2029.
The company stated that the notes were issued pursuant to an indenture dated June 5, 2012, with Computershare Trust Company, National Association serving as trustee. Interest on these notes will be payable semi-annually, with the first payment commencing on August 1, 2025. The notes are unsecured and rank equally with Eastman Chemical’s other unsecured and unsubordinated debt. The company maintains a healthy current ratio of 1.51 and a manageable debt-to-equity ratio of 0.9.
Eastman Chemical retains the option to redeem the notes before July 1, 2029, at a price determined by a specified formula or at 100% of the principal amount after this date. The indenture also includes covenants limiting certain secured indebtedness and sale and leaseback transactions, among other restrictions.
The proceeds from the sale of the notes, which after deductions are expected to be approximately $246.2 million, are intended for general corporate purposes. These may include working capital, capital expenditures, debt repayment, and other strategic initiatives. With last twelve months free cash flow of $688 million and a consistent dividend payment history spanning 32 years, the company demonstrates strong financial management. For deeper insights into Eastman Chemical’s financial health and growth prospects, including 8 additional ProTips, visit InvestingPro.
The sale was facilitated by an underwriting agreement with BofA Securities, Inc. and J.P. Morgan Securities LLC, dated February 18, 2025. The company’s legal counsel, Cleary Gottlieb Steen & Hamilton LLP, provided an opinion on the notes, a copy of which is included in the SEC filing.
This financial move by Eastman Chemical is part of the company’s broader strategy to manage its capital structure and support ongoing business operations. According to InvestingPro analysis, the stock is currently slightly undervalued, with analysts maintaining a positive outlook and forecasting profitability for the upcoming year. The information provided is based on a press release statement and InvestingPro data.
In other recent news, Eastman Chemical Company reported its fourth-quarter 2024 earnings, revealing an impressive performance with earnings per share (EPS) of $1.87, significantly surpassing analysts’ expectations of $1.61. Despite slightly missing revenue forecasts with actual figures at $2.25 billion compared to the projected $2.28 billion, the company demonstrated strong investor confidence. Eastman Chemical’s robust earnings growth of 22% for the full year 2024 highlights its strategic focus on cost reductions and innovation, particularly in circular economy projects. Additionally, the company increased its dividend for the 15th consecutive year, emphasizing its commitment to shareholder returns.
KeyBanc Capital Markets recently upgraded its outlook on Eastman Chemical, raising the stock’s price target from $121.00 to $128.00 while maintaining an Overweight rating. The analysts attributed this positive outlook to the company’s strong fourth-quarter performance and effective margin and volume stability. They project Eastman Chemical’s EPS to reach $8.38, marking a 6% increase at the midpoint of their estimates. The firm’s analysts also noted potential risks associated with rising raw material costs, which could impact pricing due to Eastman Chemical’s historical pricing lag.
Eastman Chemical continues to focus on advancing its circular economy platform and expects earnings growth in its Advanced Materials segment in the latter half of 2025. The company’s strategic initiatives, including cost reductions and innovation in circular economy projects, have bolstered its competitive position. KeyBanc anticipates that further advancements in the methanolysis recycling project could lead to continued revaluation, although concrete progress may take three to four quarters to materialize. These developments reflect Eastman Chemical’s ongoing efforts to enhance its financial health and strategic direction.
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