The Globe and Mail reports in its Thursday, June 5, edition that Stifel analyst Daryl Young continues to rate NFI Group "buy." The Globe's David Leeder writes that Mr. Young knocked his share target back by a loonie to $22. Analysts on average target the shares at $20.40. Mr. Young says in a note: "We understand some elevated cost reflects NFI being a first time issuer, but it still seems expensive. ... Moreover, we think the five-year term is a long time to lock-in given NFI is on the cusp of improving throughput volumes and returning to healthy FCF generation, presumably allowing for better terms; in our view, the repayment terms make it unlikely that NFI will retire the debt before July 1, 2028. ... Our prior forecast assumed a more attractive rate with a greater proportion of bank debt in 2026 and faster debt repayment; post transaction our cash interest costs for 2026 have increased from $69-million to $94-million. The 2026 cash interest includes a base level of locked-in interest of $67-million (9.25-per-cent high-yield notes and the 5-per-cent convert), plus an assumption for the amount/rate on the first lien bank debt, and the fees on the letters of credit (which don't show on the balance sheet)."
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