ArcelorMittal (MT) Extends $1-Billion MCB Conversion Date

ArcelorMittal MT recently declared extension of the conversion date for the $1-billion privately placed mandatory convertible bond (MCB) issued on Dec 28, 2009, by one of its fully-owned subsidiaries located in Luxembourg. The MCB is mandatorily convertible into preferred shares of such subsidiary.

The amendment to the MCB was executed on Dec 14, 2017. The mandatory conversion date of the bond has been extended to Jan 29, 2021. The bond is not listed and was privately placed with Credit Agricole Corporate and Investment Bank.

According to ArcelorMittal, the subsidiary has simultaneously executed amendments providing for the extension of outstanding notes into which it invested the proceeds of the bond issuance. These are linked to shares of the listed companies, China Oriental Group Company Limited and Eregli Demir Va Celik Fab. T. AS of Turkey, both of which are held by subsidiaries of ArcelorMittal.    

Shares of ArcelorMittal have gained 17.9% in the past three months, outperforming the industry’s 6.6% growth.

 

ArcelorMittal, during third-quarter earnings call, said that market conditions are favorable and demand environment remains positive along with healthy steel spreads. The company continues to expect global apparent steel consumption to grow in the range of 2.5-3% for 2017.

ArcelorMittal is poised to gain from its efforts to reduce debt. It also remains on track with its cost-reduction actions under Action 2020 program that includes plans to optimize costs and increase steel shipment volumes.

The company is also expanding its global portfolio of automotive steels by launching a new generation of advanced high strength steels. The launch of these steels is in sync with the company’s Action 2020 program that aims to achieve targeted financial improvements for the company by 2020.

ArcelorMittal Price and Consensus

 

ArcelorMittal Price and Consensus | ArcelorMittal Quote

 

Zacks Rank & Stocks to Consider

ArcelorMittal currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Westlake Chemical Corporation WLK, Daqo New Energy Corp. DQ and Kronos Worldwide Inc. KRO, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Westlake Chemical has an expected long-term earnings growth rate of 10.6%. Its shares have moved up 84.5% year to date.

Daqo New Energy has an expected long-term earnings growth rate of 7%. Its shares have surged a whopping 160.4% year to date.

Kronos Worldwide has an expected long-term earnings growth rate of 5%. Its shares have rallied 117.3% year to date.

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