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ONEOK (OKE) to Offer $1.2B Senior Notes in Two Tranches
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ONEOK, Inc. (OKE - Free Report) announced its decision to issue $1.2 billion senior notes. The company stated that it will offer $500 million of 10-year senior notes and $700 million of 30-year senior notes at a coupon of 4% and 4.95%, respectively.
ONEOK will issue these notes under the existing shelf registration statement with the Securities and Exchange Commission. The company expects the notes offering to close on Jul 13.
Proceeds From the Offering
After the deduction of the underwriting discounts and commissions, the company estimates remaining net proceeds at $1.18 billion. This amount will be used for general corporate purposes like repayment of existing indebtedness and capital expenditures.
Factors in Favour of ONEOK
ONEOK recently completed the acquisition of its primary growth vehicle, ONEOK Partners. This acquisition is expected to be accretive to the company due to the latter’s financial strength, diversified operations, excellent market connectivity and systematic investments in organic projects.
ONEOK will also benefit from the Roadrunner Gas Transmission Pipeline, ONEOK West Tex Pipeline expansion and the Midwestern Gas Transmission expansion in 2017. The company has a huge network of nearly 37,000 miles of natural gas liquids and natural gas pipelines, which are strategically located in highly productive regions.
Increase in drilling activities can be expected due to lower breakeven costs and improved well productivity in the STACK and SCOOP plays and Williston and Permian basins. As a result, the company will gain from the aforementioned factor in the second half of the year.
Owing to the recent drilling in the Permian region, Plains All American Pipeline, L.P. (PAA - Free Report) and Magellan Midstream Partners, L.P. launched an open season at Midland, TX, through their jointly-owned BridgeTex Pipeline Company, LLC. (Read more: Plains All American, Magellan Midstream Launch Open Season)
Price Movement
Shares of ONEOK have lost 9.7% in the last six month compared with the Utility Gas Distribution industry's gain of 2.7%.
Stringent government regulations, high debt levels and increase in competition in the pipeline business are the primary reasons behind the company’s weak performance.
Just Energy Zacks Consensus Estimate for 2017 moved up nearly 24% to 31 cents per share in the last 60 days. The company also delivered a positive earnings surprise in two out of the last four quarters with an average surprise of 145.02%.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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ONEOK (OKE) to Offer $1.2B Senior Notes in Two Tranches
ONEOK, Inc. (OKE - Free Report) announced its decision to issue $1.2 billion senior notes. The company stated that it will offer $500 million of 10-year senior notes and $700 million of 30-year senior notes at a coupon of 4% and 4.95%, respectively.
ONEOK will issue these notes under the existing shelf registration statement with the Securities and Exchange Commission. The company expects the notes offering to close on Jul 13.
Proceeds From the Offering
After the deduction of the underwriting discounts and commissions, the company estimates remaining net proceeds at $1.18 billion. This amount will be used for general corporate purposes like repayment of existing indebtedness and capital expenditures.
Factors in Favour of ONEOK
ONEOK recently completed the acquisition of its primary growth vehicle, ONEOK Partners. This acquisition is expected to be accretive to the company due to the latter’s financial strength, diversified operations, excellent market connectivity and systematic investments in organic projects.
ONEOK will also benefit from the Roadrunner Gas Transmission Pipeline, ONEOK West Tex Pipeline expansion and the Midwestern Gas Transmission expansion in 2017. The company has a huge network of nearly 37,000 miles of natural gas liquids and natural gas pipelines, which are strategically located in highly productive regions.
Increase in drilling activities can be expected due to lower breakeven costs and improved well productivity in the STACK and SCOOP plays and Williston and Permian basins. As a result, the company will gain from the aforementioned factor in the second half of the year.
Owing to the recent drilling in the Permian region, Plains All American Pipeline, L.P. (PAA - Free Report) and Magellan Midstream Partners, L.P. launched an open season at Midland, TX, through their jointly-owned BridgeTex Pipeline Company, LLC. (Read more: Plains All American, Magellan Midstream Launch Open Season)
Price Movement
Shares of ONEOK have lost 9.7% in the last six month compared with the Utility Gas Distribution industry's gain of 2.7%.
Stringent government regulations, high debt levels and increase in competition in the pipeline business are the primary reasons behind the company’s weak performance.
Zacks Rank and Stock to Consider
ONEOK currently carries a Zacks Rank #5 (Strong Sell). A better-ranked stock in the same space is Just Energy Group, Inc. carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Just Energy Zacks Consensus Estimate for 2017 moved up nearly 24% to 31 cents per share in the last 60 days. The company also delivered a positive earnings surprise in two out of the last four quarters with an average surprise of 145.02%.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>