Uil Holdings Corp. has a market cap of $858.6 million; its shares were traded at around $28.6 with a P/E ratio of 14.6 and P/S ratio of 1. The dividend yield of Uil Holdings Corp. stocks is 6%. Uil Holdings Corp. had an annual average earning growth of 6.2% over the past 5 years.UIL is in the portfolios of Paul Tudor Jones of The Tudor Group, Jim Simons of Renaissance Technologies LLC, Jean-Marie Eveillard of First Eagle Investment Management, LLC.
Highlight of Business Operations:There has been considerable dislocation in the auction rate bond market, and there have been failed auctions, resulting from insufficient clearing bids. The auctions for the Auction Rate Bonds have failed, beginning with the March 2008 auction. When there are insufficient clearing bids as a result of an auction, the interest rates are set at a rate equal to the one-month London Interbank Offered Rate (LIBOR) times a multiple of 125% to 225%, based on the credit rating on the Auction Rate Bonds assigned by Moody s or S&P. The principal and interest payments on $64.5 million principal amount of Auction Rate Bonds are insured by Ambac Assurance Corporation (Ambac). These bonds are currently rated by Moody s. The credit rating from Moody s on these bonds is based on the higher of Ambac s credit rating or UI s underlying credit rating. Ambac has been downgraded by Moody s to a rating below UI s rating. Accordingly, the credit rating from Moody s on these bonds is now based on the current underlying credit rating of UI of Baa2. In the event of subsequent failed auctions of the Auction Rate Bonds, the interest rate on the bonds will continue to be reset as described above. The interest rate on these bonds was 0.514% at October 4, 2010 which was equal to two times LIBOR. The interest rate risk of variable rate financings, including the reset at auction of the interest rate on $64.5 million principal amount of Auction Rate Bonds, is $161,250 of increased interest expense for every 0.25% increase in interest rates.
Asset values of funded pension and postretirement plans as of September 30, 2010 and December 31, 2009 were approximately $235.9 million and $231.3 million, respectively. These assets are impacted by changing conditions in the capital markets which can result in reductions in asset value and require UIL Holdings to make contributions to the plans. While there was no minimum required pension contribution for the 2009 plan year, UI currently expects to make total contributions of approximately $8 million in 2010. Given current interest rates and asset values, UI currently expects to make contributions of approximately $45 to $50 million in 2011. Such contribution levels will be adjusted, if necessary, based upon actual December 31, 2010 discount rates and asset values.
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