VALLEY FORGE, Pa. - UGI Corporation (NYSE:UGI), a marketer of energy products and services, announced today its plans to offer $600 million in convertible senior notes due in 2028, targeting qualified institutional buyers. The private offering, which hinges on market conditions, also includes an option for the initial purchasers to acquire an additional $90 million in notes within 13 days of issuance.
The notes, maturing on June 1, 2028, will be senior and unsecured, accruing interest payable semi-annually. They will not be redeemable before maturity. Holders will have the right to convert their notes under certain conditions and during specified periods, with UGI settling conversions in cash and possibly shares of its common stock.
In the event of specific corporate changes deemed a "fundamental change," noteholders, with limited exceptions, may request UGI to repurchase their notes at the principal amount plus any accrued interest.
The interest rate, initial conversion rate, and other terms will be established at the time of the offering's pricing. UGI intends to use the net proceeds to refinance existing debt, including under its senior credit facility, and for general corporate purposes.
The offering and any common stock issuable upon conversion of the notes will not be registered under the Securities Act of 1933 or any state securities laws. They will be offered only through exemptions from registration requirements. This announcement is not an offer to sell or a solicitation of an offer to buy the notes.
UGI's portfolio includes natural gas and electric distribution, midstream services, propane distribution, renewable natural gas generation, and energy marketing services in the US and Europe.
This press release contains forward-looking statements about the offering's terms, timing, size, and intended use of proceeds. These statements are subject to market risks and uncertainties that could affect the offering's outcome and the use of proceeds.
This article is based on a press release statement from UGI Corporation.
InvestingPro Insights
UGI Corporation's recent announcement to offer convertible senior notes is a strategic move to refinance existing debt and for general corporate purposes. To better understand the potential investment opportunity, it's important to consider some key financial metrics and insights from InvestingPro.
InvestingPro Data:
- Market Capitalization: UGI currently has a market cap of $5.15 billion, indicating its size and significance in the sector.
- Dividend Yield: As of the latest data, UGI offers a dividend yield of 6.11%, showcasing its commitment to returning value to shareholders.
- P/E Ratio (Adjusted): With an adjusted P/E ratio of 11.42 for the last twelve months as of Q2 2024, UGI is positioned in the market with a valuation that reflects its earnings.
InvestingPro Tips:
- Consistency in Dividends: UGI has a strong track record of dividend payments, having maintained them for 54 consecutive years and raised them for 31 consecutive years. This consistency is a testament to the company's financial stability and commitment to shareholders.
- Growth Potential: Analysts expect UGI's net income to grow this year, which could be a positive sign for investors looking for companies with growth potential.
Investors interested in UGI's financial health and future outlook can find additional insights on InvestingPro, where there are currently 9 more InvestingPro Tips available that delve deeper into the company's performance and projections. For those considering a subscription, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. This offer provides access to comprehensive analysis tools and data that can help make informed investment decisions.
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