Celanese Corporation CE recently announced that its subsidiary, Celanese US Holdings LLC, has priced registered offerings of $2.6 billion in total principal amount of notes, including $700 million total principal amount of 6.5% Senior Notes due 2030, $1.1 billion total principal amount of 6.75% Senior Notes due 2033 and €750 million (roughly $810 million) total principal amount of 5.000% Senior Notes due 2031. 

The aggregate principal amount of notes in the offering was increased from $2 billion to $2.6 billion. CE and some of its fully owned domestic subsidiaries will guarantee the Notes on a senior unsecured basis.

The offering is expected to close on or around March 14, 2025. The proceeds from the offering, along with borrowings under the company’s 364-day term loan credit agreement, will be used to finance previously announced cash tender offers for part of the Issuer’s 4.777% Senior Notes due 2026 and 6.165% Senior Notes due 2027. Additionally, the funds will be used to pay down part of the company’s borrowings under its five-year term loan credit agreement due 2027, repay amounts owed under its revolving credit facility due 2027, repay the Issuer’s 6.050% Senior Notes due March 15, 2025, and for general corporate purposes, which may include paying off other outstanding debt.

This offering reaffirms the company's commitment to proactively managing its debt maturity profile by matching near-term maturities with a conservative expectation for free cash flow generation and divestiture proceeds while providing extra flexibility through prepaid debt.

Celanese’s shares have lost 64.5% in the past year against an 20.9% decline of the industry.

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Celanese anticipates the demand and pricing challenges experienced in the fourth quarter to persist in the first quarter of 2025. It sees continued softness in core end-markets such as automotive, construction, paints, coatings and industrial. CE also expects additional headwinds from seasonality in the acetate tow and medical implants businesses as well as a planned outage at the Bishop, TX, facility in the first quarter. 

Celanese expects first-quarter earnings per share in the band of 25-50 cents, including the impact of non-recurring costs.

CE’s Rank & Key Picks

CE currently carries a Zacks Rank #5 (Strong Sell).

Better-ranked stocks in the basic materials space include Carpenter Technology Corporation CRS, Methanex Corporation MEOH and Axalta Coating Systems Ltd. AXTA

Carpenter Technology currently carries a Zacks Rank #2 (Buy). CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 15.7%. The company's shares have soared 218.2% in the past year. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Methanex, which currently carries a Zacks Rank #2, beat the consensus estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of roughly 85.2%, on average. MEOH’s shares have gained 1.5% over the past year. 

Axalta Coating Systems, which currently carries a Zacks Rank #1, beat the consensus estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of roughly 16.3%, on average. AXTA’s shares have rallied 10.7% over the past year. 

 

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