Babcock & Wilcox's Credit Facility Increases to $1.3B - Analyst Blog

On Jun 25, 2014, energy engineering and construction services provider, The Babcock & Wilcox Company BWC announced changes in its credit facilities under the Second Amended and Restated Credit Agreement.

Per the agreement, the credit facility has been increased to $1 billion from $700 million. Babcock & Wilcox stated that it also has an option to increase this facility by $400 million, which depends on receiving additional contracts.

The agreement also provided a $300 million term loan facility to Babcock & Wilcox. Following the closure of the agreement, the company has already borrowed half the term loan amount and is now left with $150 million to draw at a later date.

This amended facility brings more good news for Babcock & Wilcox as it comes with a reduced interest rate and extended maturity date.  The interest rate to be paid on the borrowing now stands at London Interbank Offered Rate (LIBOR) plus 1.375%, lower than the earlier rate of LIBOR plus 1.5%. The new rate will be applicable starting Aug 2014. Moreover, the facility now has maturity in 2019 against the earlier expiry period of 2017.
 
Management at Babcock & Wilcox added that this increase in available credit should facilitate the company's operating and strategic initiatives and also improve financials.  

Headquartered in Charlotte, NC, Babcock & Wilcox is engaged in providing clean energy technology and services for the nuclear, fossil and renewable power markets worldwide. It currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can consider better-ranked players from the same sector like Blount International Inc. BLT, Barnes Group Inc. B and Dover Corporation DOV. While Blount International sports a Zacks Rank #1 (Strong Buy), Barnes Group and Dover Corp hold a Zacks Rank #2 (Buy).


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
DOVER CORP DOV: Free Stock Analysis Report
 
BABCOCK&WILCOX BWC: Free Stock Analysis Report
 
BARNES GRP B: Free Stock Analysis Report
 
BLOUNT INTL BLT: Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research
Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorAnalyst Ratings
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!