ArcelorMittal (MT) Stock Climbs on Debt Reduction Efforts
NEW YORK (TheStreet) -- ArcelorMittal (MT) - Get Report stock is up by 1.21% to $5.01 in mid-afternoon trading on Wednesday, as the Luxembourg-based steel producer offers to buy back its most expensive bonds in an effort to reduce its $13.3 billion debt load.
ArcelorMittal tendered for all $1.5 billion of 9.85% securities due June 2019, according to a company statement. It offered 17% more than face value and placed a May 18 deadline for acceptances.
The notes have the highest coupons among ArcelorMittal's outstanding fixed-rate bonds, Bloomberg reports.
This is ArcelorMittal's second offer to repurchase debt in roughly a month. The steelmaker is hoping to cut borrowing costs as prices are negatively impacted by heightened competition out of China, Bloomberg adds.
"I think investors will be minded to participate because of weakness in high-yield metals bonds this month," Mark Wade, head of industrials research at Rogge Global Partners, told Bloomberg. ArcelorMittal has "excellent liquidity" so it makes sense for the company to buy back pricey notes, he said.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.
ArcelorMittal's weaknesses include its disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.
You can view the full analysis from the report here: MT
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.
