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Non-Tech : Income Investing

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To: Elroy who wrote (40507)9/13/2019 12:29:54 AM
From: E_K_S3 Recommendations

Recommended By

   of 43452

So here is the new rate information:

B&G Foods Announces Pricing And Upsizing Of Public Offering Of Senior Notes

B&G Foods, Inc. (NYSE:BGS) announced today the pricing of a registered public offering of $550.0 million aggregate principal amount of 5.25% senior notes due 2027 at a price to the public of 100% of their face value. The offering has been upsized from the previously announced amount of $450.0 million. The notes will be guaranteed on a senior unsecured basis by certain subsidiaries of B&G Foods. The offering is expected to close on September 26, 2019, subject to customary closing conditions.

B&G Foods intends to use the proceeds of the offering, together with the proceeds of additional borrowings under B&G Foods' proposed first lien senior secured term loan facility, to redeem all of B&G Foods' outstanding 4.625% senior notes due 2021( $700million), repay a portion of B&G Foods' borrowings under its revolving credit facility, pay related fees and expenses and for general corporate purposes.

B&G Foods Announces Proposed Refinancing

B&G Foods also announced that it has issued a notice of redemption for all $700.0 million principal amount of its outstanding 4.625% senior notes due 2021 at a cash redemption price of 100.0% of the principal amount of the notes being redeemed, plus accrued and unpaid interest on such amount, to, but excluding, the redemption date of October 10, 2019. The notice of redemption is conditioned on the completion by B&G Foods of the refinancing described above.
From their latest 10K


They should save $7.65 million in annual interest expense or about $0.11/share They end up w/ $225 million less debt at around $1.6 Bln.

Based on the 2020 earnings of $1.88 + $0.11/share interest expense savings= $1.99/share

Graham Valuation w/ BV=$13.28/share & 2020 EPS @ $1.99/share = $24.38/share
(this factors in 4% organic growth)

Stock still 25% undervalued

Company still needs to grow earnings and maybe one small accretive acquisition at $125million in next 18 months.

You get a 9.6% dividend, w/ the refinance they now cover their dividend and company expects at least 4% growth. They still could cut the dividend and provide a bit of extra coverage but the big gains will be from those Green Giant pre-packaged food lines they plan to release (see their presentation). Those are high margin items too.

I am a holder of the stock and will re-evaluate if/when the market prices this at $25/share.

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