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Energy Transfer (ET) Prices Notes Worth $4B to Refinance Debts
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Energy Transfer LP (ET - Free Report) announced that it priced a public offering of four tranches of senior notes, the aggregate principal amount being $4 billion. The first series of $1.0 billion aggregate principal amount of 6.050% senior notes due in 2026 is offered at 99.941% of the face value and the second series of $500 million aggregate principal amount of 6.100% senior notes due in 2028 is offered at 99.887%.
The third series of $1.0 billion aggregate principal amount of 6.400% senior notes due in 2030 is offered at 99.885% of face value and the fourth series of $1.5 billion aggregate principal amount of 6.550% senior notes due in 2033 is offered at 99.886%.
Energy Transfer intends to utilize the net proceeds of nearly $3.973 billion (before offering expenses) from this offering to refinance existing indebtedness, including borrowings under its revolving credit facility and for general partnership purposes.
Energy Transfer’s current total debt-to-total capital ratio is 54.02%, slightly higher than its industry average of 52.68%. The firm is trying to lower its capital costs by refinancing its existing high-interest-bearing long-term debts. The proper management of debt is quite essential as the Federal Reserve continues to plan for more interest rate hikes.
Can Energy Transfer Sustain its Steady Performance
Energy Transfer owns and operates a diversified portfolio of energy assets in the United States. The company benefits from its portfolio of assets with geographic diversity. Its multiple segments generate high-quality, balanced earnings, with no single segment contributing more than 30% of the firm’s consolidated Adjusted EBITDA for the three months ended Jun 30, 2023.
The vast majority of the firm’s segment margins are fee-based and therefore have limited commodity price sensitivity. Energy Transfer’s decision to acquire Crestwood Equity Partners LP , having complementary gathering and processing assets located in the Williston, Delaware and Powder River basins, will continue to boost ET’s performance. The transaction is expected to be immediately accretive to distributable cash flow per unit of Energy Transfer.
Price Movement
Its units have gained 6.5%, outperforming its industry’s 1.9% growth in the past three months.
Image Source: Zacks Investment Research
Zacks Rank & A Key Pick
Energy Transfer currently has a Zacks Rank #3 (Hold).
The long-term (three- to five-year) earnings growth of CNX and CEG are 5.56% and 23.3%, respectively.
The Zacks Consensus Estimate of 2023 earnings per share of CNX Resources and Constellation Energy are pinned at $1.61 and $5.47, respectively. The 2023 Zacks Consensus Estimate for CNX and CEG reflects an increase of 1.3% and 0.9% in the past 60 days.
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Energy Transfer (ET) Prices Notes Worth $4B to Refinance Debts
Energy Transfer LP (ET - Free Report) announced that it priced a public offering of four tranches of senior notes, the aggregate principal amount being $4 billion. The first series of $1.0 billion aggregate principal amount of 6.050% senior notes due in 2026 is offered at 99.941% of the face value and the second series of $500 million aggregate principal amount of 6.100% senior notes due in 2028 is offered at 99.887%.
The third series of $1.0 billion aggregate principal amount of 6.400% senior notes due in 2030 is offered at 99.885% of face value and the fourth series of $1.5 billion aggregate principal amount of 6.550% senior notes due in 2033 is offered at 99.886%.
Energy Transfer intends to utilize the net proceeds of nearly $3.973 billion (before offering expenses) from this offering to refinance existing indebtedness, including borrowings under its revolving credit facility and for general partnership purposes.
Energy Transfer’s current total debt-to-total capital ratio is 54.02%, slightly higher than its industry average of 52.68%. The firm is trying to lower its capital costs by refinancing its existing high-interest-bearing long-term debts. The proper management of debt is quite essential as the Federal Reserve continues to plan for more interest rate hikes.
Can Energy Transfer Sustain its Steady Performance
Energy Transfer owns and operates a diversified portfolio of energy assets in the United States. The company benefits from its portfolio of assets with geographic diversity. Its multiple segments generate high-quality, balanced earnings, with no single segment contributing more than 30% of the firm’s consolidated Adjusted EBITDA for the three months ended Jun 30, 2023.
The vast majority of the firm’s segment margins are fee-based and therefore have limited commodity price sensitivity. Energy Transfer’s decision to acquire Crestwood Equity Partners LP , having complementary gathering and processing assets located in the Williston, Delaware and Powder River basins, will continue to boost ET’s performance. The transaction is expected to be immediately accretive to distributable cash flow per unit of Energy Transfer.
Price Movement
Its units have gained 6.5%, outperforming its industry’s 1.9% growth in the past three months.
Image Source: Zacks Investment Research
Zacks Rank & A Key Pick
Energy Transfer currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks from the same sector are CNX Resources (CNX - Free Report) and Constellation Energy Corporation (CEG - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term (three- to five-year) earnings growth of CNX and CEG are 5.56% and 23.3%, respectively.
The Zacks Consensus Estimate of 2023 earnings per share of CNX Resources and Constellation Energy are pinned at $1.61 and $5.47, respectively. The 2023 Zacks Consensus Estimate for CNX and CEG reflects an increase of 1.3% and 0.9% in the past 60 days.