PITTSBURGH--(BUSINESS WIRE)--Allegheny Technologies Incorporated (NYSE: ATI) recently announced that it issued $350 million of new senior unsecured notes at a 5.875% interest rate due in December 2027. The company will use the proceeds of the 2027 Notes, along with cash on hand, to redeem all its outstanding $500 million of 5.95% senior unsecured notes due January 2021 on December 23, 2019. Combined, these actions reduce ATI’s debt by $150 million and are expected to reduce annual interest expense by $9 million beginning in 2020.
“We continue to make progress on our strategic imperatives, including the ongoing strengthening of our balance sheet through overall debt reduction,” said Robert S. Wetherbee, President and Chief Executive Officer. “This debt reducing action, coupled with our ongoing efforts to lower risk within our defined benefit pension plan, provides ATI with enhanced financial flexibility to fuel future profitable growth.”
ATI will recognize a debt extinguishment charge of approximately $21 million in the fourth quarter 2019 related to the 2021 Notes redemption. Additionally, the release of a portion of ATI’s deferred tax valuation allowances in the fourth quarter 2019 is expected to be in the range of $30 to $40 million, approximately $5 million higher than the previously disclosed range. While ATI’s projected 2020 reported income tax rate is expected to be approximately 23% to 25% of pretax results, the company’s cash tax requirements for 2020 will be similar to 2019, substantially lower than the reported 2020 tax rate due to the ongoing benefits in the U.S. of net operating loss carryforwards.
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ATI is a global manufacturer of technically advanced specialty materials and complex components. ATI revenue was $4.1 billion for the twelve-month period ended Sep. 30, 2019. Our largest markets are aerospace & defense, particularly jet engines. We also have a strong presence in the oil & gas, electrical energy, medical, automotive, and other industrial markets. ATI is a market leader in manufacturing differentiated specialty alloys and forgings that require our unique manufacturing and precision machining capabilities and our innovative new product development competence. We are a leader in producing powders for use in next-generation jet engine forgings and 3D-printed aerospace products. See more at our website ATImetals.com.