FBU - Fletcher Building

[Balance]

Absolutely - and sometimes you will be right and sometimes you will find you are wrong.

Glad for you it worked out for you this time. Markets currently in some unreal lala-land and absolutely separated from reality. Good for the people who took the gamble.

Does not change the fundamentals, though, doesn't it?

Agreed.

And your perception and assessment of fundamentals are different from others.

Which is why the market is such a lively and exciting place to price stocks of course!

[Checkmate]

Just bought the dip at $3.55... What a bargain! Thanks to the US correction today!
Still waiting patiently for the US equities to come back down so i can put some money to work over there though...

[Checkmate]

Wondering when there is going to be an update on the banking covenants...?
ie: whether they comply or not...

[Balance]

Wondering when there is going to be an update on the banking covenants...?
ie: whether they comply or not...

Certainly a positive announcement - repaying US$300m of US debt early with NZ$350m from cash resources. Some great hedging there by FBU treasury team!

https://www.nzx.com/announcements/355440

Fletcher Building today announced its intention to make an early repayment of US$300 million of USPP notes.

CEO Ross Taylor said that the USPP notes, which were issued in 2012 and due to mature in 2022 and 2024, were the Company’s most expensive source of debt, with an average cost of funding of 5.4%. Repayment of the notes would reduce the Company’s funding costs by cNZ$17 million per year, whilst still leaving the Company with significant liquidity of cNZ$1.1 billion.

The USPP 2012 notes have a notional value of US$300 million. After taking account of foreign exchange and interest rate derivatives held by the Company in respect of these notes, the repayment amount to be made by the Company is expected to be cNZ$350 million.

[Checkmate]

Certainly a positive announcement - repaying US$300m of US debt early with NZ$350m from cash resources. Some great hedging there by FBU treasury team!

https://www.nzx.com/announcements/355440

Fletcher Building today announced its intention to make an early repayment of US$300 million of USPP notes.

CEO Ross Taylor said that the USPP notes, which were issued in 2012 and due to mature in 2022 and 2024, were the Company’s most expensive source of debt, with an average cost of funding of 5.4%. Repayment of the notes would reduce the Company’s funding costs by cNZ$17 million per year, whilst still leaving the Company with significant liquidity of cNZ$1.1 billion.

The USPP 2012 notes have a notional value of US$300 million. After taking account of foreign exchange and interest rate derivatives held by the Company in respect of these notes, the repayment amount to be made by the Company is expected to be cNZ$350 million.

Just saw this! Great news, shows the company is still in a pretty strong position financially and is reducing costs for the future.

[traineeinvestor]

Certainly a positive announcement - repaying US$300m of US debt early with NZ$350m from cash resources. Some great hedging there by FBU treasury team!

FBU's management did something well? I'm shocked, I tell you. Just shocked.

[Balance]

Just saw this! Great news, shows the company is still in a pretty strong position financially and is reducing costs for the future.

The reduction in annual interest expense of $17m is definitely a positive in the light of the updated banking arrangements announced recently :

https://www.nzx.com/announcements/354406

"Under the agreements, the Company may elect to rely on more favourable levels for its Total Interest Cover and Senior Interest Cover covenants for the period from June 2020 to December 2021 (inclusive) if required. These levels are a Total Interest Cover ratio of 1.5 times (normally 2.0 times) and a Senior Interest Cover ratio of 2.25 times (normally 3.0 times), with EBIT in 4Q20 for the purposes of testing these interest cover ratios set at $231 million."

Maybe, just maybe there could be a dividend paid later in the year!

[sb9]

The reduction in annual interest expense of $17m is definitely a positive in the light of the updated banking arrangements announced recently :

https://www.nzx.com/announcements/354406

"Under the agreements, the Company may elect to rely on more favourable levels for its Total Interest Cover and Senior Interest Cover covenants for the period from June 2020 to December 2021 (inclusive) if required. These levels are a Total Interest Cover ratio of 1.5 times (normally 2.0 times) and a Senior Interest Cover ratio of 2.25 times (normally 3.0 times), with EBIT in 4Q20 for the purposes of testing these interest cover ratios set at $231 million."

Maybe, just maybe there could be a dividend paid later in the year!

My pick divvy is out for this FY to be reported in later in Aug. They're setting up for divvy to be paid out from FH 21 onwards.

[Balance]

My pick divvy is out for this FY to be reported in later in Aug. They're setting up for divvy to be paid out from FH 21 onwards.

I think you are right.

But if FBU ever wants to draw a line between the wretched recent past (as in the last 4 years) and a brighter future under new management, paying a dividend for F20 would do it.

[Checkmate]

The reduction in annual interest expense of $17m is definitely a positive in the light of the updated banking arrangements announced recently :

https://www.nzx.com/announcements/354406

"Under the agreements, the Company may elect to rely on more favourable levels for its Total Interest Cover and Senior Interest Cover covenants for the period from June 2020 to December 2021 (inclusive) if required. These levels are a Total Interest Cover ratio of 1.5 times (normally 2.0 times) and a Senior Interest Cover ratio of 2.25 times (normally 3.0 times), with EBIT in 4Q20 for the purposes of testing these interest cover ratios set at $231 million."

Maybe, just maybe there could be a dividend paid later in the year!

Yup! If I read this correctly, they will pay a dividend if they can meet the old interest cover ratios?
it seems like they will have a better chance at that after the decision to eliminate all of that unfavourable debt.