HOUSTON - Summit Midstream (NYSE:SMLP) Partners, LP (NYSE: SMLP) revealed on Monday that its subsidiary, Summit Midstream Holdings, LLC, has initiated a $500 million offering of Senior Secured Second Lien Notes due in 2029.
The proceeds from this offering, alongside existing cash and borrowings under the company's asset-based lending credit facility, are earmarked to repurchase or redeem the Partnership's outstanding notes due in 2025 and 2026, cover accrued interest, and for general corporate purposes.
The new securities, to be backed by the Partnership and certain subsidiaries, will share the collateral currently securing the Partnership's asset-based lending commitments. The offering is targeted at qualified institutional buyers in the U.S. and international investors in compliance with Regulation S under the Securities Act of 1933.
This financial move does not constitute an offer to sell or a solicitation to buy the securities, nor does it serve as a redemption notice for the existing notes due in 2025 and 2026. The announced offering is contingent upon market conditions and other factors, with no assurance that the offering will be completed as planned or that the intended use of proceeds will be achieved.
Summit Midstream Partners, operating in key unconventional resource basins in the U.S., specializes in midstream energy infrastructure assets. The company provides gathering, processing, and transportation services for natural gas, crude oil, and produced water, under long-term agreements.
The information in this article is based on a press release statement from Summit Midstream Partners, LP.
In other recent news, Summit Midstream Partners, LP has made significant strides in recent developments. The company's subsidiaries have launched a tender offer to repurchase up to $215 million in principal of their 8.500% Senior Secured Second Lien Notes due 2026. This move, referred to as the Asset Sale Offer, is in accordance with the terms of the indenture governing the notes.
In addition to this, Summit Midstream has reported a robust start to the year with a net income of $132.9 million and adjusted EBITDA of $70.1 million. The company also completed the sale of its Northeast segment assets for approximately $700 million and is now focusing on organic growth and acquisitions in the Rockies and Permian segments.
Moreover, Summit Midstream is looking into potential debt paydown and refinancing options, as well as the possibility of extending their bank deal and potentially increasing the size of their revolver. These are among the latest developments from the company, as it continues to position itself for a solid performance in the coming years.
InvestingPro Insights
As Summit Midstream Partners, LP (NYSE: SMLP) ventures into a significant new offering of Senior Secured Second Lien Notes, investors and industry observers are closely monitoring the company's financial health and stock performance. To provide a clearer picture, InvestingPro data and tips offer valuable insights into SMLP's current market standing.
InvestingPro Data highlights a robust Revenue Growth of 20.5% over the last twelve months as of Q1 2024, indicating a strong upward trajectory for the company's earnings. This is complemented by a notable Gross Profit Margin of 54.2%, which suggests that Summit Midstream Partners maintains a healthy difference between the cost of goods sold and revenue, a key indicator of financial efficiency and profitability.
Moreover, the company's stock price has experienced a significant increase, with a 6 Month Price Total Return of 117.58% and a 1 Year Price Total Return of 138.84%, reflecting investor confidence and a bullish market sentiment towards SMLP. This positive momentum is also evident in the stock trading near its 52-week high, at 99.02% of this peak value.
InvestingPro Tips further enrich our understanding of SMLP's current position. The company's stock price movements have been quite volatile, which may present both risks and opportunities for traders and investors alike. Summit Midstream Partners has been profitable over the last twelve months, an essential factor for long-term investment considerations.
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It is worth noting that while Summit Midstream Partners does not pay a dividend to shareholders, the company's strong return over the last three months and high return over the last year may appeal to growth-focused investors. With liquid assets exceeding short-term obligations, SMLP appears to be in a solid position to meet its immediate financial liabilities, an encouraging sign for stakeholders evaluating the company's offering of Senior Secured Second Lien Notes.
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