MKS Instruments repriced $3.1 billion in term loans, reducing interest rates and saving approximately $15 million annually.
Quiver AI Summary
MKS Instruments, Inc. has announced the successful repricing of its $2.5 billion and €0.6 billion secured tranche B term loans, with interest rates reduced from SOFR plus 225 basis points to SOFR plus 200 basis points for USD loans, and from EURIBOR plus 275 basis points to EURIBOR plus 250 basis points for EUR loans. The company also made a voluntary prepayment of $100 million on its USD tranche B loans, decreasing the principal from $2.6 billion to $2.5 billion. These measures are projected to save approximately $15 million annually in cash interest, reflecting MKS's commitment to reducing its debt load and maximizing cash flow. The term loan repricing involved several financial institutions as joint lead arrangers and is part of MKS's broader strategy to improve financial efficiency over the past 18 months.
Potential Positives
- Successful repricing of $2.5 billion and €0.6 billion secured tranche B term loans, resulting in reduced interest rates.
- Annualized cash interest savings of approximately $15 million due to the repricing and prepayment actions.
- Demonstrated commitment to deleveraging the balance sheet and proactively reducing costs over the last 18 months.
- Voluntary prepayment of $100 million on USD tranche B term loans, reducing overall debt burden.
Potential Negatives
- The company remains heavily leveraged, with total term loans still at $2.5 billion after the repricing and prepayment, which may concern investors about financial stability.
- The press release indicates that MKS Instruments has been actively seeking to reduce costs and maximize free cash flow, suggesting there may be ongoing financial pressures affecting the company's operations.
- The forward-looking statements contain disclaimers about potential changes in interest rates that could materially affect projected cash interest savings, which introduces uncertainty into the company's financial planning.
FAQ
What did MKS Instruments announce on January 24, 2025?
MKS Instruments announced the successful repricing of its $2.5 billion and €0.6 billion secured tranche B term loans.
How much interest rate reduction did MKS achieve?
MKS reduced the interest rate on USD tranche B loans from SOFR plus 225 basis points to SOFR plus 200 basis points.
What annual cash interest savings is MKS expecting?
MKS expects annualized cash interest savings of approximately $15 million from the combined actions.
Who were the joint lead arrangers for the term loan repricing?
The joint lead arrangers included JPMorgan Chase Bank, Barclays Bank, BofA Securities, Citibank, and others.
What is the purpose of MKS Instruments’ financial actions?
MKS aims to deleverage its balance sheet and reduce costs while maximizing free cash flow to repay debt.
Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.
$MKSI Insider Trading Activity
$MKSI insiders have traded $MKSI stock on the open market 6 times in the past 6 months. Of those trades, 0 have been purchases and 6 have been sales.
Here’s a breakdown of recent trading of $MKSI stock by insiders over the last 6 months:
- JOHN EDWARD WILLIAMS (EVP & GM, PSD) sold 1,800 shares for an estimated $213,678
- JACQUELINE F MOLONEY has made 0 purchases and 3 sales selling 800 shares for an estimated $92,530.
- ELIZABETH MORA has made 0 purchases and 2 sales selling 550 shares for an estimated $63,079.
To track insider transactions, check out Quiver Quantitative's insider trading dashboard.
$MKSI Hedge Fund Activity
We have seen 247 institutional investors add shares of $MKSI stock to their portfolio, and 162 decrease their positions in their most recent quarter.
Here are some of the largest recent moves:
- PRICE T ROWE ASSOCIATES INC /MD/ removed 2,566,927 shares (-37.5%) from their portfolio in Q3 2024, for an estimated $279,050,634
- WELLINGTON MANAGEMENT GROUP LLP removed 1,257,169 shares (-35.5%) from their portfolio in Q3 2024, for an estimated $136,666,841
- JPMORGAN CHASE & CO removed 783,502 shares (-48.9%) from their portfolio in Q3 2024, for an estimated $85,174,502
- BARCLAYS PLC added 530,620 shares (+108.6%) to their portfolio in Q3 2024, for an estimated $57,683,700
- VANGUARD GROUP INC added 380,714 shares (+5.5%) to their portfolio in Q3 2024, for an estimated $41,387,418
- NEUBERGER BERMAN GROUP LLC added 321,763 shares (+29.9%) to their portfolio in Q3 2024, for an estimated $34,978,855
- BANK OF NEW YORK MELLON CORP removed 314,641 shares (-30.3%) from their portfolio in Q3 2024, for an estimated $34,204,623
To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.
Full Release
ANDOVER, Mass., Jan. 24, 2025 (GLOBE NEWSWIRE) -- MKS Instruments, Inc. (NASDAQ: MKSI), a global provider of enabling technologies that transform our world, announced today that it successfully completed the repricing of its $2.5 billion and €0.6 billion secured tranche B term loans maturing in 2029. The repricing results in a reduction of the interest rate for the USD tranche B term loans from SOFR plus a margin of 225 basis points to SOFR plus 200 basis points and EUR tranche B term loans from EURIBOR plus a margin of 275 basis points to EURIBOR plus 250 basis points.
In addition, concurrently with the repricing, MKS made a voluntary prepayment of $100 million on its USD tranche B term loans, reducing the principal amount of USD tranche B term loans from $2.6 billion to $2.5 billion.
Based on the current interest rates, the annualized cash interest savings from the combined actions is approximately $15 million.
“We continue to demonstrate our commitment to deleveraging our balance sheet,” said Ram Mayampurath, Executive Vice President, Chief Financial Officer and Treasurer. “Our latest term loan B repricing is one of many actions taken over the last 18 months to proactively seek opportunities to reduce costs and maximize free cash flow to repay debt.”
JPMorgan Chase Bank, N.A., Barclays Bank PLC, BofA Securities, Inc., Citibank, N.A., HSBC Securities (USA) Inc., Mizuho Bank, Ltd., Morgan Stanley Senior Funding, Inc., and PNC Bank, National Association acted as the joint lead arrangers and joint bookrunners for the tranche B term loan repricing.
About MKS Instruments
MKS Instruments enables technologies that transform our world. We deliver foundational technology solutions to leading edge semiconductor manufacturing, electronics and packaging, and specialty industrial applications. We apply our broad science and engineering capabilities to create instruments, subsystems, systems, process control solutions and specialty chemicals technology that improve process performance, optimize productivity and enable unique innovations for many of the world's leading technology and industrial companies. Our solutions are critical to addressing the challenges of miniaturization and complexity in advanced device manufacturing by enabling increased power, speed, feature enhancement, and optimized connectivity. Our solutions are also critical to addressing ever-increasing performance requirements across a wide array of specialty industrial applications. Additional information can be found at
www.mks.com
.
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
This press release contains a forward-looking statement within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27 of the Securities Act, and Section 21E of the Securities Exchange Act regarding MKS’ cash interest savings. This statement is only a prediction based on current assumptions and expectations. Actual events or results, including changes in interest rates, may differ materially from those in the forward-looking statement set forth herein. Readers are referred to MKS' filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q for a discussion of these and other important risk factors concerning MKS and its operations. MKS is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
Company Contact
:
Paretosh Misra
Vice President, Investor Relations
Telephone: (978) 284-4705
Email: [email protected]