SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Gold/Mining/Energy : NGL to da moon (well, maybe to $10?)!!

 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
From: Elroy1/25/2024 6:06:56 PM
   of 103
 
NGL Energy Partners LP Announces Pricing of $2.2 Billion Offering of Senior Secured Notes

TULSA, Okla., January 25, 2024--( BUSINESS WIRE)--NGL Energy Partners LP (NYSE: NGL) ("NGL"), through its wholly owned subsidiaries NGL Energy Operating LLC and NGL Energy Finance Corp., today announced the upsizing of their senior secured notes offering from $2.1 billion to $2.2 billion and have priced $900 million in aggregate principal amount of 8.125% senior secured notes due 2029 (the "2029 Notes") and $1.3 billion in aggregate principal amount of 8.375% senior secured notes due 2032 (the "2032 Notes" and, together with the 2029 Notes, the "Notes"). NGL expects to use the net proceeds of the offering, together with the borrowings under a new seven-year $700.0 million senior secured term loan facility expected to be entered into concurrently with the offering, (i) to fund the redemption, and related discharge of the indentures governing, NGL’s existing 6.125% senior notes due 2025, 7.5% senior notes due 2026, and 7.500% senior secured notes due 2026, including any applicable premiums and accrued and unpaid interest, (ii) to pay fees and expenses in connection therewith, (iii) to repay borrowings under NGL’s senior secured asset-backed lending facility and (iv) to the extent of any remaining net proceeds, for general corporate purposes.

-----

Ok, my quick calculation for interest expense is as follows:

They've also got a $700m term loan that they're evidently issuing in conjunction with these two tranches of debt. Not sure what rate to give the seven year loan, so lets say 8.25% in the middle of these two.

That means interest expense from here out is $240m per year. Ok. Manageable.

The next question is what is NGL going to do about it's preferred stock, which has been in arrears for about three years and accumulating obligations? With ~$645m EBITDA they've got plenty of options.

I wonder what rate they would get if they tried to refinance all the preferred stock? There's about $900m in three tranches, some of it is already earning at a painful floating rate, and a big chunk of it moves from fixed rate to a painful floating rate in mid-April. So they probably will act on this soon.
It's not out of the question to see a nominal distribution beginning in fiscal 2025 (starts June Q 2024). They could easily afford a token 10 cents per quarter, that's $52m per year.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext