The expiry of the new credit facility is expected in March 2019. The new credit facility replaces the steel producer's existing credit facility that's also worth $1.1 billion. The existing credit facility was set to expire in April 2016.
AK Steel will use the new credit facility for working capital and general corporate purposes.
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TheStreet Ratings team rates AK STEEL HOLDING CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate AK STEEL HOLDING CORP (AKS) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for AK STEEL HOLDING CORP is currently extremely low, coming in at 11.23%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, AKS's net profit margin of 2.40% is significantly lower than the industry average.
- Net operating cash flow has declined marginally to $113.50 million or 3.07% when compared to the same quarter last year. Despite a decrease in cash flow AK STEEL HOLDING CORP is still fairing well by exceeding its industry average cash flow growth rate of -51.14%.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Metals & Mining industry average, but is greater than that of the S&P 500. The net income increased by 115.3% when compared to the same quarter one year prior, rising from -$230.40 million to $35.20 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.8%. Since the same quarter one year prior, revenues slightly increased by 2.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- This stock has increased by 72.03% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in AKS do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- You can view the full analysis from the report here: AKS Ratings Report