Why the Emeco (ASX:EHL) share price finished higher today

Emeco shares received a boost towards the end of market trade today…
The post Why the Emeco (ASX:EHL) share price finished higher today appeared first on The Motley Fool Australia. –

The Emeco Holdings Limited (ASX: EHL) share price ended the day higher today following its successful entry into the Australian bond market.

At the end of market trade, the equipment rental company’s shares closed the day at 98 cents apiece, up 3.70%.

Emeco price’s senior secured notes

Investors bought up Emeco shares after the company announced a positive update to the ASX.

According to its release, Emeco advised it has placed a $250 million price tag on its senior secured notes. The notes mark the company’s inaugural issuance in the domestic Australian Medium-Term Note (MTN) market.

Emeco stated that the bonds will have a fixed coupon rate of 6.25%, paid bi-annually for a 5-year period. Settlement of the bonds is expected to be completed on 2 July 2021, with the maturity date falling on 10 July 2026.

Proceeds of the notes will be used to repay the company’s outstanding obligations. This relates to the 9.25% interest March 2024 United States noted and associated hedges.

Emeco noted that the transaction meets a number of its strategic funding objectives. This includes:

Extending the debt maturity profile;
Lowering its funding costs – an annual interest saving of around $9 million;
Establishing a presence in the domestic bond market; and
Replacing US$-denominated debt with A$-denominated debt.

Emeco managing director and CEO, Ian Testrow touched on the notes offer, saying:

We are very pleased with the exceptional investor response to our entry into the Australian bond market. We had planned to partially refinance our US notes, however the significant investor interest has provided us with the opportunity to fully retire our legacy debt.

The Notes significantly reduce our funding costs, lengthens our maturity profile and will result in a cleaner capital structure.

In addition to the news, Emeco reaffirmed its FY21 operating earnings before interest, tax, depreciation and amortisation (EBITDA) of $235 million to $238 million.

The company revealed it will release its full-year results for the 2021 financial year on 18 August, 2021.

About the Emeco share price

The Emeco share price has lost 8% in the past 12 months and is down roughly 15% year-to-date. The company’s shares hit a recent 52-week high of $1.245 in February but have headed lower ever since.

Emeco has a market capitalisation of about $522 million, with a tad more than 544 million shares outstanding.

The post Why the Emeco (ASX:EHL) share price finished higher today appeared first on The Motley Fool Australia.

Should you invest $1,000 in Emeco right now?

Before you consider Emeco, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Emeco wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

Best ASX value buys for the commodities supercycle

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!