Genesis Energy, L.P. Announces Early Results and Initial Settlement Date for Tender Offer for Up to $575 Million Aggregate Principal Amount of Its 8.0% Senior Notes Due 2027

Rhea-AI Summary

Genesis Energy (NYSE: GEL) announced the early results of its cash tender offer for up to $575 million of its 8.0% senior notes due 2027. As of December 18, 2024, the company received tenders for $877,967,000 of the notes, making the offer oversubscribed. With $981,245,000 in total outstanding notes, GEL will implement a pro-ration factor of approximately 66% for accepting tendered notes.

The initial settlement date is set for December 20, 2024. Due to oversubscription at the Early Tender Deadline, holders who tender notes after this deadline will not have their notes accepted for payment. The tender offer will expire on January 6, 2025.

Positive

• Strong noteholder interest with $877.97M tendered notes, indicating confidence in the refinancing initiative
• Successful debt management strategy targeting $575M of outstanding notes

Negative

• Oversubscription means some noteholders will not have their full tender amounts accepted
• Pro-ration factor of 66% indicates capacity to accommodate all tendered notes

Insights

Fixed Income Analyst

This debt tender offer represents a significant liability management exercise for Genesis Energy. The company is offering to purchase up to $575 million of its $981.2 million outstanding 8.0% senior notes due 2027. The strong response, with $877.9 million tendered, indicates high investor participation and confidence in the company's refinancing strategy.

The 66% pro-ration factor means noteholders will only be able to tender approximately two-thirds of their holdings, reflecting strong demand. This oversubscription suggests investors are seeking to reduce exposure to these high-yield notes, possibly in anticipation of lower rates in the future. The early tender results demonstrate Genesis' proactive approach to managing its debt maturity profile and potentially reducing its interest expense burden.

For retail investors: Think of this like a company buying back some of its IOUs before they're due, but so many debt holders wanted to cash out that the company can only buy back about 2/3 of what each person offered to sell.

Financial Risk Analyst

The successful tender offer indicates strong balance sheet management by Genesis Energy. By targeting the 8.0% notes, which carry a relatively high coupon rate in today's environment, the company is likely positioning itself to refinance at potentially lower rates. This could lead to reduced interest expenses and improved cash flow metrics.

The significant oversubscription, with $877.9 million tendered versus the $575 million cap, suggests bondholders view this as an attractive exit opportunity. This high participation rate typically signals market approval of the company's liability management strategy. The early settlement date of December 20, 2024, allows Genesis to optimize its debt structure before year-end.

In simple terms: Genesis is showing financial prudence by trying to replace expensive debt with potentially cheaper debt and investors are eager to participate in this refinancing strategy.

HOUSTON--(BUSINESS WIRE)-- Genesis Energy, L.P. (NYSE: GEL) today announced that receipt of tenders for an aggregate principal amount of $877,967,000 of our outstanding 8.0% senior notes due 2027 (the “Notes”) that we co-issued with our subsidiary, Genesis Energy Finance Corporation in connection with its previously announced cash tender offer (such transaction, the “Tender Offer”) to purchase up to $575 million aggregate principal amount outstanding of the Notes, as of 5:00 p.m., New York City time, on December 18, 2024 (the “Early Tender Deadline”), as well as the expected initial settlement date for the Tender Offer on December 20, 2024 (the “Initial Settlement Date”). As of December 18, 2024, $981,245,000 aggregate principal amount of the Notes were outstanding.

Because the purchase of all validly tendered Notes would cause us to purchase a principal amount greater than the $575 million Tender Cap, the Tender Offer is oversubscribed. If we accept Notes in the Tender Offer, we will accept for purchase tendered Notes on a prorated basis as described in the Tender Offer Documents using a pro ration factor of approximately 66%. Payment for any Notes so accepted will be made promptly on the Initial Settlement Date, subject to the satisfaction or waiver of the conditions to the Tender Offer. Because the Tender Offer is oversubscribed as of the Early Tender Deadline, holders of Notes who validly tender Notes after the Early Tender Deadline will not have any of their Notes accepted for payment.

The Tender Offer is being made pursuant to the terms and conditions of an offer to purchase, dated as of December 5, 2024, as amended on December 5, 2024 (as may be further amended or supplemented from time to time, the “Offer to Purchase”).

The Tender Offer will expire at 5:00 p.m., New York City time, on January 6, 2025, unless extended or earlier terminated (such time and date as the same may be extended, the “Expiration Time”). The withdrawal deadline for validly tendered Notes was 5:00 p.m., New York City time, on December 18, 2024.

In connection with the Tender Offer, we have retained Wells Fargo Securities, LLC as the Dealer Manager. Questions regarding the Tender Offer should be directed to Wells Fargo Securities, LLC by calling collect at (704) 410-4820 or toll free at (866) 309- 6316. Requests for copies of the Offer to Purchase and related documents should be directed to D.F. King & Co., Inc., the Tender Agent and Information Agent for the Tender Offer, at (888) 628- 9011 (toll free).

This press release includes forward-looking statements as defined under federal law. Although we believe that our expectations are based upon reasonable assumptions, no assurance can be given that our goals will be achieved, including statements related to the Tender Offer. For a discussion of some of the risks and important factors that could affect such forward-looking statements, see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are publicly available on our website at https://www.genesisenergy.com/. Actual results may vary materially. We undertake no obligation to publicly update or revise any forward- looking statement.

About Genesis Energy, L.P.

Genesis Energy, L.P. is a diversified midstream energy master limited partnership headquartered in Houston, Texas. Genesis’ operations include offshore pipeline transportation, soda and sulfur services, marine transportation and onshore facilities and transportation. Genesis’ operations are primarily located in the Gulf Coast region of the United States, Wyoming and the Gulf of Mexico.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241219826149/en/

Genesis Energy, L.P.

Dwayne Morley

VP – Investor Relations

(713) 860-2536

Source: Genesis Energy, L.P.

FAQ

What is the total amount of notes tendered in Genesis Energy's (GEL) tender offer?

Genesis Energy received tenders for $877,967,000 of its 8.0% senior notes due 2027.

What is the pro-ration factor for GEL's December 2024 tender offer?

Due to oversubscription, Genesis Energy will use a pro-ration factor of approximately 66% for accepting tendered notes.

When is the expiration date for Genesis Energy's (GEL) 2024 tender offer?

The tender offer will expire at 5:00 p.m., New York City time, on January 6, 2025, unless extended or terminated earlier.

What is the maximum amount Genesis Energy (GEL) will purchase in its tender offer?

Genesis Energy will purchase up to $575 million aggregate principal amount of its 8.0% senior notes due 2027.

Will GEL accept notes tendered after the Early Tender Deadline of December 18, 2024?

No, due to oversubscription at the Early Tender Deadline, holders who tender notes after this deadline will not have any of their notes accepted for payment.