Genesis Energy, L.P. Announces Public Offering of Senior Notes

Rhea-AI Summary

Genesis Energy (NYSE: GEL) has announced a public offering of $400 million senior notes due 2033. The notes will be co-issued with Genesis Energy Finance and guaranteed by all subsidiaries except unrestricted ones. The company plans to use the proceeds to purchase or redeem up to $385 million of its outstanding 8.0% senior notes due 2027 and for general partnership purposes, including repaying revolving borrowings under its senior secured credit facility. Wells Fargo Securities is leading the offering as the primary underwriter.

Positive

• Refinancing of higher-cost debt (8.0% notes) with potentially lower-cost new issuance
• Debt maturity extension from 2027 to 2033
• Strengthening of balance sheet through reduction of revolving credit facility borrowings

Negative

• Taking on $400 million in new debt obligations
• Potential increase in total debt if new notes are not fully used for refinancing existing debt

Insights

Financial Analyst

This $400 million senior notes offering represents a strategic debt refinancing move by Genesis Energy. The company aims to replace its 8.0% notes due 2027 with potentially lower-cost debt maturing in 2033, which could improve its debt profile and reduce interest expenses. The decision to refinance $385 million of existing notes suggests management's proactive approach to liability management. Using the remaining proceeds for revolving credit facility repayment further strengthens the balance sheet. The involvement of Wells Fargo Securities as lead underwriter adds credibility to the offering. This refinancing could provide more financial flexibility and potentially lower debt service costs, though the final impact will depend on the new notes' interest rate.

Market Research Analyst

The timing of this debt refinancing is strategic, as Genesis Energy operates in capital-intensive midstream energy sectors including offshore pipelines, soda ash and marine transportation. The extended maturity to 2033 provides longer-term stability to the capital structure. The company's diversified operations across the Gulf Coast, Wyoming and Gulf of Mexico provide stable cash flows to support this debt. The market's reception of this offering will be crucial, as it could indicate investor confidence in Genesis's long-term prospects. While the immediate impact may include transaction costs, the potential for reduced interest expenses and improved debt maturity profile makes this a positive development for the $1.4 billion market cap company.

HOUSTON--(BUSINESS WIRE)-- Genesis Energy, L.P. (NYSE: GEL) today announced the commencement, subject to market and other conditions, of a registered, underwritten public offering of $400,000,000 in aggregate principal amount of senior notes due 2033 (the “notes”). The notes will be co-issued with our subsidiary, Genesis Energy Finance Corporation, and initially will be guaranteed by all of our subsidiaries, other than our unrestricted subsidiaries. We intend to use the net proceeds from this offering (i) to purchase or redeem up to $385 million aggregate principal amount of our outstanding 8.0% senior notes due 2027 (or such lesser aggregate principal amount of such notes that could be acquired with the net cash proceeds of this offering) and (ii) for general partnership purposes, including repaying a portion of the revolving borrowings outstanding under our senior secured credit facility.

Wells Fargo Securities, LLC is leading the offering along with several joint book-running managers and co-managers. A copy of the preliminary prospectus supplement and accompanying base prospectus relating to this offering, when available, may be obtained from Wells Fargo Securities, LLC, Attn: Transaction Management, 550 South Tryon Street, Charlotte, North Carolina 28202, or by telephone at (704) 715-4700.

You may also obtain these documents for free, when they are available, by visiting the SEC’s website at www.sec.gov.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The offer of the notes is being made only through the prospectus supplement and accompanying base prospectus, each of which is part of our effective shelf registration statement on Form S-3, previously filed with the Securities and Exchange Commission.

This press release does not constitute a notice of redemption under the indenture governing the 8.0% senior notes due 2027.

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.

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 regarding our ability to successfully close the offering and to use the net proceeds as indicated above. Actual results may vary materially. We undertake no obligation to publicly update or revise any forward-looking statement.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241205248403/en/

Genesis Energy, L.P.

Dwayne Morley

VP – Investor Relations

(713) 860-2536

Source: Genesis Energy, L.P.

FAQ

What is the size of Genesis Energy's (GEL) 2033 senior notes offering?

Genesis Energy (GEL) is offering $400 million in aggregate principal amount of senior notes due 2033.

How will Genesis Energy (GEL) use the proceeds from the 2033 notes offering?

The proceeds will be used to purchase or redeem up to $385 million of 8.0% senior notes due 2027 and for general partnership purposes, including repaying revolving borrowings under their senior secured credit facility.

Who is the lead underwriter for Genesis Energy's (GEL) 2033 notes offering?

Wells Fargo Securities, is leading the offering as the primary underwriter.