HOUSTON - Genesis Energy, L.P. (NYSE: NYSE:GEL) has upsized and priced its public offering of senior unsecured notes, now totaling $700 million with a 7.875% interest rate, maturing in 2032. Originally announced at $500 million, the offering was increased due to investor demand. The notes, priced at face value, will be co-issued by Genesis Energy Finance Corporation and guaranteed by most of the partnership’s subsidiaries, except those classified as unrestricted.
The partnership plans to allocate the net proceeds from this offering towards the redemption of all outstanding 6.250% senior unsecured notes due in 2026. The remaining funds are intended for general partnership purposes, which include repaying part of the existing borrowings under its credit facility. The transaction is anticipated to close on May 9, 2024, subject to standard closing conditions.
A consortium of banks, including RBC Capital Markets, LLC and Wells Fargo Securities, LLC, among others, are serving as joint book-running managers for the offering. Comerica (NYSE:CMA) Securities, Inc. has been named as co-manager.
Genesis Energy, a master limited partnership based in Houston, Texas, operates in various sectors of the midstream energy industry. Its services include offshore pipeline transportation, soda ash and sulfur services, marine transportation, as well as onshore facilities and transportation, predominantly in the Gulf Coast and Gulf of Mexico regions, as well as in Wyoming.
The offering is made through a prospectus supplement and an accompanying base prospectus as part of an effective shelf registration statement previously filed with the U.S. Securities and Exchange Commission (SEC). Interested parties can obtain these documents from the SEC's website once they are available.
InvestingPro Insights
Genesis Energy, L.P. (NYSE: GEL) has shown resilience and investor confidence as demonstrated by the upsizing of its public offering of senior unsecured notes. A glance at the company's financial health through InvestingPro data reveals a mixed picture that investors may find intriguing. With a market capitalization of approximately $1.58 billion USD and a P/E ratio standing at 37.12, Genesis Energy trades at a high earnings multiple, suggesting that investors may expect high earnings growth in the future. This is further supported by the company's PEG ratio over the last twelve months as of Q1 2024, which is remarkably low at 0.05, indicating potential undervaluation relative to its earnings growth.
Moreover, Genesis Energy's commitment to shareholder returns is notable, with the company having maintained dividend payments for 28 consecutive years. The dividend yield as of the latest data stands at 4.7%, which is attractive to income-focused investors. Additionally, the firm has been profitable over the last twelve months, which is a positive indicator of its operational efficiency.
Investors should also consider the company's recent performance, as Genesis Energy has experienced a strong return over the last three months, with a price total return of 16.35%. This momentum is reflected in the company's trading near its 52-week high, with the price being 97.43% of the peak.
For those looking to delve deeper into Genesis Energy's financials and future prospects, there are additional InvestingPro Tips available, which can provide comprehensive insights into the company's debt situation and other key metrics. To explore these insights further, visit InvestingPro for a more detailed analysis. Remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With 5 more InvestingPro Tips listed, investors can gain a well-rounded view of Genesis Energy's investment potential.
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