This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Four Seasons Down on Debt Deal

Investors checked out of Canadian hotel group Four Seasons (FS ) Monday after the company announced a $200 million convertible debt offering.

In reaction to the announcement, shares of the upscale Canadian hotel chain fell 1.2% as investors fear the dilutive affect of the company's fund raising efforts. The company has a market cap of $2.06 billion.

In a brief statement, Four Seasons said the senior notes could be converted into limited voting shares in "specific circumstances," but did not specify what the funds would be used for.

Shares fell 70 cents to $57.50, having closed Friday near their 52-week high of $59.83

But news of the debt deal, which was underwritten by Morgan Stanley, should not be a surprise to investors. On March 17, the company filed with the Securities and Exchange Commission to offer up to $250 million in debt securities from time-to-time in one or more offerings.

The debt offering comes as the entire hotel industry is on the verge of a powerful cyclical recovery. Already, occupancy rates are rising, which could lead to higher room prices, especially at the luxury end that Four Seasons serves.

Signs are already emerging that the company is poised to outperform. On May 6, Four Seasons, which announces results in Canadian currency, announced first-quarter net earnings of $11.5 million, or 31 cents a share, up sharply from last year, when the company lost $9.3 million, or 27 cents a share.

On an adjusted basis, Four Seasons earned $7.7 million, or 21 cents a share, easily topping the 15-cent Wall Street estimate and the year-ago adjusted profit of $2.5 million, or 7 cents a share.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.99 0.00%
FB $99.54 0.00%
GOOG $678.11 0.00%
TSLA $148.25 0.00%
YHOO $26.82 0.00%


Chart of I:DJI
DOW 16,014.38 -12.67 -0.08%
S&P 500 1,852.21 -1.23 -0.07%
NASDAQ 4,268.7630 -14.99 -0.35%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs