Methanex Corporation MEOH recently announced that its fully-owned subsidiary, Methanex US Operations Inc., has priced a private offering of $600 million aggregate principal amount of 6.250% senior unsecured notes due 2032 that is exempt from registration under the United States Securities Act of 1933. 

The offering size has been increased to $600 million from the previously disclosed $500 million in aggregate principal amount of notes. The notes will be issued at 99.289% of the aggregate principal amount, with an effective yield to maturity of 6.375%, and Methanex will guarantee them on a senior basis. The offering is likely to conclude on or around Nov. 22, 2024, subject to customary closing conditions.

Methanex expects to use the net proceeds of the offering to cover a portion of the cash acquisition price of its previously announced agreement to acquire OCI Global's international methanol business and for general corporate purposes. The notes will be subject to a special mandatory redemption if either the OCI Acquisition is not completed within the time period required by the related acquisition agreement, which may be extended (but no later than May 31, 2026), or if Methanex publicly announces that it will not proceed with the OCI acquisition for any reason, as further described in the notes' terms.

Shares of Methanex have gained 2.2% in the past year compared with a 2.6% rise of the industry.

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Methanex's production projection for the fourth quarter is about 1.9 million tons, which will be sold in the fourth quarter and the first quarter of 2025 as produced sales adjust to increasing production. Actual output may differ by quarter due to gas availability in Chile and New Zealand, turnarounds, other gas availability, unscheduled outages and unexpected events. 

The company expects adjusted EBITDA to remain flat sequentially, with higher produced sales and a higher average realized price offset by lower New Zealand gas sales and no benefit from Egypt's insurance recovery in the fourth quarter. Based on the company's October and November stated pricing, MEOH anticipates its average realized price range will be $365-$375 per ton for these months.

MEOH’s Rank & Other Key Picks

MEOH currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks in the basic materials space include Carpenter Technology Corporation CRS, IAMGOLD Corporation IAG and CF Industries Inc. CF. 

Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.1%. The company's shares have soared 157.2% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for IAG’s current-year earnings is pegged at 56 cents, indicating a year-over-year rise of 522.2%. The Zacks Consensus Estimate for IAG's current-year earnings has been going up in the past 30 days. IAG, a Zacks Rank #2 stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 203.4%. The company's shares have rallied roughly 112% in the past year.

The Zacks Consensus Estimate for CF’s current-year earnings is pegged at $6.32 per share. CF, a Zacks Rank #1 stock, beat the consensus estimate in two of the last four quarters while missed twice, with the average earnings surprise being 10.3%. CF has rallied around 13.1% in the past year.

 

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