HOUSTON - Plains GP Holdings (NASDAQ:PAGP) LP has entered into an underwriting agreement for the issuance and sale of $650 million in senior notes, according to a recent 8-K filing with the Securities and Exchange Commission. The 5.700% Senior Notes, due in 2034, are being offered through an existing shelf registration statement and are expected to close on June 27, 2024, subject to customary closing conditions.
The underwriting agreement, dated June 17, 2024, involves Citigroup Global Markets Inc., MUFG Securities Americas Inc., SMBC Nikko Securities America, Inc., and Truist Securities, Inc. as representatives of the underwriters. The notes will be issued by Plains All American Pipeline, L.P. and PAA Finance Corp., both consolidated subsidiaries of Plains GP Holdings.
The offering is described in detail in a Prospectus Supplement to the Prospectus dated September 8, 2021, which is part of the Registration Statement filed on the same date. The notes will be issued pursuant to a supplemental indenture by and among the issuers and U.S. Bank Trust Company National Association, as the successor trustee.
The proceeds from the sale of the notes are expected to be used for general corporate purposes, which may include the repayment or refinancing of existing debt, funding for capital expenditures, or other business investments. The issuance of these notes is a strategic move by Plains GP Holdings to strengthen its financial position and support its ongoing operations.
The 8-K filing and the underwriting agreement provide detailed information about the terms of the offering and the notes themselves, ensuring transparency for investors and stakeholders. The filing confirms that the information herein is based on a press release statement.
In other recent news, Plains All American Pipeline, L.P. and Plains GP Holdings have reported a steady outlook in their First Quarter 2024 Earnings Conference Call. The company announced an adjusted EBITDA of $718 million for the first quarter and maintained its 2024 EBITDA forecast.
Plains All American is actively focusing on consistent cash flow and capital returns to investors, with recent acquisitions and contract renegotiations. The company also expects performance in 2026 to be generally flat compared to 2024, with potential variances.
Plains All American has also acquired an additional 10% in Saddlehorn Pipeline Company and Mid-Con Terminal asset. Permian production growth is anticipated to be 200,000 to 300,000 barrels per day by the end of 2024. These are some of the recent developments in the company's strategy and operations.
InvestingPro Insights
As Plains GP Holdings LP navigates its latest strategic financial move with the sale of senior notes, real-time data from InvestingPro provides a snapshot of the company's current market standing. With a market capitalization of $4.17 billion and a solid dividend yield of 7.16%, Plains GP Holdings demonstrates its commitment to returning value to shareholders. The company's stock is known for its low price volatility, which might appeal to investors seeking stability in the energy sector.
An InvestingPro Tip highlights that Plains GP Holdings has been consistent in maintaining dividend payments for 11 consecutive years, a testament to its financial resilience and management's confidence in the company's cash flow.
Moreover, analysts predict profitability for the company this year, which could be a positive signal for potential investors considering the purchase of the newly issued senior notes. It is noteworthy that the company has been profitable over the last twelve months, an important factor for those assessing the company's ability to meet its future financial obligations.
The current P/E ratio stands at 20.43, reflecting the market's valuation of the company's earnings. Despite a recent dip in revenue growth, with a -13.62% change over the last twelve months, Plains GP Holdings remains a prominent player in the Oil, Gas & Consumable Fuels industry. Investors interested in further insights and tips can find additional information on InvestingPro, which lists 6 more InvestingPro Tips for Plains GP Holdings. To access these insights and enhance your investment strategy, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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