Hawk Corp. buys back $10 million of 8.75% senior notes
10:43 am, December 1, 2009
Hawk Corp. (NYSE: HWK) said it has bought in privately negotiated transactions $10 million principal amount of its 8.75% senior notes for $9.9 million. The maker of friction products for brakes and clutches said it has recorded a pre-tax charge of $100,000 as a result of the transactions. However, Hawk said it expects interest savings of about $100,000 in the fourth quarter of 2009 as a result of the note purchases. Hawk said its total debt was reduced to $77.1 million after these purchases.
"We have repurchased these bonds in furtherance of our strategy to prudently manage our balance sheet by opportunistically buying back debt at attractive rates, while maintaining flexibility to pursue acquisition opportunities, continue our stock buy-back program and support internal capital projects,” Ronald Weinberg, Hawk chairman and CEO, said in a statement.
“With this debt repurchase, we expect to save approximately $600,000 after-tax, or seven cents per diluted share, on an annual basis, in reduced interest costs," Mr. Weinberg said.
Hawk said it may retire or purchase more senior notes through open market purchases or privately negotiated transactions. Hawk said such purchases, if any, will depend on prevailing market conditions, the company's liquidity requirements, contractual restrictions and other factors.
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