As the clock ticks down on Milacron Inc.'s March 15 deadline to refinance more than $150 million in debt, a big jump in its stock price and higher bond prices in December indicated financial markets are becoming more confident that the plastics machinery maker will get it done.
Milacron executives have remained tight-lipped about how they will refinance $115 million in bonds and about $55 million from a revolving line of credit. But in December, Cincinnati-based Milacron made two announcements that some of its credit terms have been loosened, as it moves to secure more-permanent financing.
On Dec. 2, Milacron announced that its main lender relaxed terms of its revolving credit. Then Dec. 24, the company said banks have extended its sale-of-receivables program - which was due to expire at the end of 2003 - until Feb. 27. Under the program, Milacron can sell up to $40 million of receivables, of which about $35 million currently is utilized.
Milacron's bond prices have increased in recent weeks, according to two bond analysts. At the end of December, the bonds were trading at about $85-$87 - significantly higher than the low $70s trading level in November.
Milacron's stock price rose more than 75 percent in December, from a Dec. 1 close of $2.39 to $4.22 on Dec. 29. During the fourth quarter of 2003, trading volume doubled on the New York Stock Exchange from the normal level of the past few years - and trading has spiked up much higher than that on several days the past few weeks, analysts said.
Mark Koznarek, who follows Milacron for Cleveland-based FTN Midwest Research, upgraded Milacron from sell to hold.
``It's just smelling better,'' he said. ``It's feeling like the worst is behind us. Probably, the odds are a little bit better that [the refinancing] will get done.''