HOUSTON, TX – Plains All American Pipeline, L.P. (NASDAQ:PAA), a Delaware-based pipeline transportation and energy storage company, announced today the successful issuance of $650 million in senior notes. The offering, completed on Thursday, involves 5.700% senior notes due September 15, 2034.
The senior notes are unsecured and will rank equally with Plains All American's current and future senior debt, and senior to any future subordinated debt. Interest on the notes will be paid semi-annually, with the first payment due on March 15, 2025. The company retains the option to redeem the notes, in whole or in part, before maturity at specified redemption prices.
The issuance was conducted under an indenture agreement with U.S. Bank Trust Company, National Association, serving as the trustee. This agreement includes customary covenants limiting the company's ability to engage in certain transactions such as sale and leaseback transactions, incurring liens, and mergers or asset sales, among others, with specified exceptions.
In the event of default, which includes non-payment of interest or principal, failure to comply with the indenture covenants, or bankruptcy-related events, the trustee or holders of at least 25% of the principal amount of the outstanding notes may declare the principal, premium, and accrued interest due and payable immediately.
The proceeds from the notes offering are expected to be used for general corporate purposes, which may include repaying or refinancing debt, funding capital expenditures, or for working capital.
This financial move comes as part of Plains All American Pipeline's broader strategy to manage its capital structure and to ensure long-term financial flexibility. The company's business address is located at 333 Clay Street, Suite 1600, Houston, Texas, 77002.
This announcement is based on information from a press release statement and SEC filings.
In other recent news, Plains All American, a midstream energy company, has reported robust first-quarter results and reaffirmed its financial guidance for 2024. The company registered an adjusted EBITDA of $718 million, surpassing RBC Capital's and consensus estimates.
RBC Capital Markets has subsequently raised its price target for Plains All American shares to $18, maintaining its Sector Perform rating. The firm's revised target is influenced by Plains All American's successful re-contracting efforts, which are expected to address cash flow concerns within the crude oil segment for 2026.
Furthermore, the company has acquired an additional 10% in Saddlehorn Pipeline Company and Mid-Con terminal asset for $110 million, marking significant strategic developments. Plains All American plans to generate $1.55 billion in adjusted free cash flow and allocate $1.15 billion to distributions in 2024.
These recent developments indicate Plains All American's commitment to capital discipline, robust free cash flow generation, and consistent returns to investors.
InvestingPro Insights
As Plains All American Pipeline, L.P. (NASDAQ:PAA) continues to navigate its financial strategy with the recent $650 million senior notes issuance, current metrics from InvestingPro reveal a mixed financial landscape.
The company's adjusted market capitalization stands at $12.46 billion, reflecting its significant presence in the industry. With a P/E ratio of 15.13, and a slight increase to 15.5 over the last twelve months as of Q1 2024, the company is valued at a level that suggests moderate earnings growth expectations from investors.
The company has demonstrated a robust dividend yield of 7.14% as of mid-2024, which is particularly attractive to income-focused investors, coupled with a noteworthy dividend growth of 18.69% over the last twelve months. This may signal confidence in the company's ability to maintain or increase its dividend payments moving forward. Moreover, Plains All American Pipeline has experienced substantial price appreciation, with a 40.09% one-year total return, indicating a strong performance in the market.
For investors looking to delve deeper into Plains All American Pipeline's financial health and future prospects, InvestingPro offers additional insights. There are more InvestingPro Tips available that can provide further guidance on investment decisions. To access these valuable resources and enhance your investment strategy, consider using the promo code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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