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Genesis Energy, L.P. (NYSE: GEL) has announced the pricing of a public offering of $500,000,000 in senior unsecured notes with an interest rate of 8.875%, maturing in 2030. This offering was upsized from an initial $400,000,000. The notes will be co-issued with Genesis Energy Finance Corporation and guaranteed by most subsidiaries. Proceeds will be used to redeem existing 5.625% senior notes due 2024 as part of a concurrent tender offer, while the remaining funds will support general partnership purposes, including repaying borrowings. The offering is set to close on January 25, 2023, pending customary conditions.
Positive
Upsized the offering from $400 million to $500 million, indicating strong demand.
Proceeds will help refinance existing debt, improving financial stability.
Negative
The issuance of new notes could lead to shareholder dilution.
The high interest rate of 8.875% may increase future financial obligations.
HOUSTON--(BUSINESS WIRE)--
Genesis Energy, L.P. (NYSE: GEL) today announced that it has priced a public offering of $500,000,000 in aggregate principal amount of 8.875% senior unsecured notes due 2030. The offering was upsized from the previously announced $400,000,000 in aggregate principal amount of the notes. The price to investors will be 100% of the principal amount of the notes. The notes will be co-issued with our subsidiary, Genesis Energy Finance Corporation, and will be guaranteed, with certain exceptions, by substantially all of our existing and future subsidiaries other than our unrestricted subsidiaries. We intend to use a portion of the net proceeds from the offering to fund the purchase price and accrued and unpaid interest for all of our 5.625% senior unsecured notes due 2024 that are validly tendered and accepted for payment in our concurrent tender offer and the redemption price and accrued and unpaid interest for any 5.625% senior unsecured notes due 2024 that remain outstanding after the completion or termination of our concurrent tender offer and the remainder for general partnership purposes, including repaying borrowings outstanding under our credit facility. The offering of the notes is expected to settle and close on January 25, 2023, subject to customary closing conditions.
Wells Fargo Securities, LLC, SMBC Nikko Securities America, Inc., BofA Securities, Inc., BNP Paribas Securities Corp., Capital One Securities, Inc., Citigroup Global Markets Inc., Fifth Third Securities, Inc., RBC Capital Markets, LLC, Regions Securities LLC, Scotia Capital (USA) Inc. and Truist Securities, Inc. are acting as joint book-running managers for the offering and Comerica Securities, Inc. is acting as co-manager. A copy of the final prospectus supplement and accompanying base prospectus relating to this offering, when available, may be obtained from:
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 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.
Genesis Energy, L.P. is a diversified midstream energy master limited partnership headquartered in Houston, Texas. Genesis’ operations include offshore pipeline transportation, sodium minerals and sulfur services, onshore facilities and transportation and marine transportation. Genesis’ operations are primarily located in Texas, Louisiana, Arkansas, Mississippi, Alabama, Florida, 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.
