Morgan Keegan Comments on Teleflex Unsecured Notes Offerings

On Wednesday evening, Teleflex (NYSE: TFX) announced a public offering of $250 mn senior unsecured notes due 2021, Morgan Keegan reports.

“Teleflex plans to use $125 mn of the proceeds to prepay a term loan due in 2014 with the remaining funds to be used for general purposes,” Morgan Keegan writes. “The transaction allows Teleflex to secure and improve the long-term capital structure, while taking advantage of relatively favorable interest rates.

“Moreover, by pushing out $125 mn in debt, the refinancing also increases Teleflex's financial flexibility to pursue strategic acquisitions given that 2/3 of the cash is currently outside of the US. Although we estimate $0.12 dilution to 2011 EPS from the financing, total dilution could be less should a portion of proceeds be used to pay down additional debt. There is no change to our estimates, Market Perform rating and $60 price target.”

Teleflex closed Wednesday at $61.47.