SouFun Prices Senior Notes - Analyst Blog
December 06 2013 - 2:00PM
Zacks
SouFun Holdings
Limited (SFUN) is offering 2.00% convertible senior notes
worth $350 million. Additionally, the initial purchasers will be
provided with a 30-day option to buy up to an additional $50
million principal amount of notes.
The proceeds from the 5-year debt will be deployed for working
capital requirements, meeting capital expenditure, funding business
expansions, acquisitions and introduction of new businesses or
services, and other general corporate purposes.
SouFun expects to close the transaction on Dec 10, 2013. The new
issuance will require the company to pay interests half-yearly,
once on Jun 15 and then on Dec 15 every year, starting from Jun 15
next year.
As of Sep 30, 2013, the debt-to-capital ratio for SouFun was 0.58x
which represented an improvement of 7 percentage points from 0.65x
at 2012 end. However, with the issuance of the $350 million debt,
the debt-to-capital ratio is expected to deteriorate.
The new issuance would require SouFun to pay an annual interest of
$7 million. Nevertheless, the company’s solid operational
performance generates funds adequate enough to service the debt
uninterruptedly. Its interest expense in the third quarter of 2013
increased 28.5% year over year to $3.6 million which is expected to
increase further, with the issuance of the debt.
SouFun currently carries a Zacks Rank #1 (Strong Buy). Other
players in the business services space, which look attractive at
current levels, include Competitive Technologies
Inc. (CTTC), Core-Mark Holding Company,
Inc. (CORE) and Furmanite Corporation
(FRM). All these stocks carry a Zacks Rank #2 (Buy).
CORE-MARK HLDG (CORE): Free Stock Analysis Report
COMPETITIVE TEC (CTTC): Get Free Report
FURMANITE CORP (FRM): Get Free Report
SOUFUN HLDG-ADR (SFUN): Free Stock Analysis Report
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