Lowell-based J.B. Hunt Transport has filed a prospectus with the U.S. Securities and Exchange Commission for a new $350 million bond issue due July 15, 2022. The logistics company plans to use the majority of the proceeds to repay $250 million in principal on the 3.3375% unsecured notes that mature on Sept. 15.
The company will use up to $97 million to retire outstanding amounts under its revolving credit agreement, according to Moody’s Investors Services. The rating service assigned a Baa1 rating to the new unsecured notes and a stable outlook for the company. Standard & Poor’s assigned a BBB+ rating to the new issue which has 3.3% coupon rate.
J.B. Hunt should net $346.941 million in proceeds from the new issue after underwriting fees.
Moody’s said the rating is supported by the company's strong track record of revenue growth, operating margins that have been consistently in the 10-11% range, and good cash flow generation.
With a moderate $1 billion of total debt at June 30, (after Moody's standard adjustments of $117 million for operating leases), Hunt has a low debt to earnings ratio as well as good liquidity. The stable rating outlook reflects Moody's expectation of high single digit growth in revenues (excluding fuel surcharges) and an (adjusted) operating income margin of around 11%.