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Gold/Mining/Energy : NGL to da moon (well, maybe to $10?)!!

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From: Elroy1/17/2024 7:38:39 PM
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TULSA, Okla., January 17, 2024--( BUSINESS WIRE)--New Term Loan Facility

NGL Energy Partners LP (NYSE: NGL) ("Partnership" or "NGL"), together with its wholly owned subsidiary NGL Energy Operating LLC ("NGL Energy Operating"), today announced plans to syndicate a new seven-year $700 million senior secured term loan facility (the "Term Loan Facility"). NGL Energy Operating will be the borrower under the Term Loan Facility. NGL Energy Operating expects to use the net proceeds of the Term Loan Facility, together with proceeds from any additional senior secured financing, to refinance existing debt (including repayment of existing senior notes); to pay related fees, costs and expenses; and for general corporate purposes.

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I think this may be good news, depending on the rate that they get for the new loan facility. This could give some indication of how NGL will do in the upcoming refinancing.

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Preliminary Third Quarter Results

In connection with the Term Loan Facility syndication, NGL is providing certain preliminary estimates of financial information for its fiscal third quarter ended December 31, 2023.

For the three months ended December 31, 2023, NGL is estimating the following:

  • Consolidated Adjusted EBITDA1: $150 - $160 million; and

  • Capital expenditures (including both maintenance and growth): $30 - $40 million.

In addition, NGL is providing the following information regarding the outstanding principal amount of certain of its debt as of December 31, 2023:

  • Asset-based revolving credit facility borrowings of: $55.0 million

  • Senior notes:

    • 6.125% senior unsecured notes due 2025: $281 million;

    • 7.5% senior unsecured notes due 2026: $320 million; and

    • 7.500% senior secured notes due 2026: $2.050 billion.
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I think the EBITDA is in line with the guidance they gave last call. It's down significantly from the year ago period. But their long term debt now is about $2.65b and $55m outstanding on the existing term loan. That's a decent three month reduction in debt......

The upsized $700m facility will be used in Q1 2024 to repurchase the 6.125% 2025 notes I think. Then the next step in the balance sheet is refinancing the $2.37b 2026 notes. The upsized term loan issuance may give us some idea of what rate to expect in the refi.
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