010835 Dial, Seeks Buyer, to Sell $200 Mln Notes

New York - Consumer products maker Dial Corp, which said last week it is seeking a buyer, said it plans to sell $200 million of five-year senior unsecured notes in the next few weeks to pay down bank debt.

Chief Financial Officer Conrad Conrad said the note sale is part of Dial's strategy to boost earnings “with a goal of maximizing value,” even as the company tries to become “part of a larger enterprise.”

Dial, based in Scottsdale, Arizona, makes Dial soap, Armour canned meats, Purex laundry detergent and Renuzit air fresheners. Banc of America Securities LLC and Deutsche Banc Alex. Brown are arranging the note sale, it said.

Analysts have said Dial could fetch about $2 billion in a sale, with price estimates ranging from $19 to $22 per share.

Dial has about $1.6 billion in annual sales, making it tough, analysts said, for the company to compete with bigger rivals such as Cincinnati-based Procter & Gamble Co., which reported $9.58 billion in revenue in its most recent quarter alone.

Credit rating agency Moody's Investors Service rates Dial's existing senior unsecured debt “Baa3,” its lowest investment grade, with a stable outlook.

Another agency, Standard & Poor's, last week cut Dial's senior unsecured debt to a roughly equivalent “BBB-minus,” reflecting Dial's “narrow product portfolio and weak financial profile,” with a developing outlook.

Dial shares traded Friday morning on the New York Stock Exchange unchanged at $16.78. They have risen 53% this year, from $11.

The company said it had about $527.5 million of debt as of June 30, about $130 million less than a year earlier.

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