Quanta Services Announces Pricing of Senior Notes Offering

Rhea-AI Summary

Quanta Services (NYSE: PWR) has announced the pricing of its senior notes offering, consisting of $600 million of 4.75% notes due 2027 and $650 million of 5.25% notes due 2034. The offering is expected to close on August 9, 2024. Quanta intends to use the net proceeds to repay existing debts, including borrowings from its commercial paper program and short-term loan facility used to finance the recent acquisition of Cupertino Electric, Inc. The offering is being made through a shelf registration statement filed with the SEC, with several financial institutions acting as joint book-running managers.

Positive

• Successful pricing of $1.25 billion in senior notes
• Proceeds to be used for debt repayment, potentially improving financial structure
• Completion of recent acquisition of Cupertino Electric, Inc., indicating business expansion

Negative

• Increase in long-term debt obligations
• Potential increase in interest expenses due to new notes issuance

Insights

Financial Analyst

Quanta Services' pricing of $1.25 billion in senior notes is a significant move that impacts its capital structure and liquidity position. The company is issuing $600 million of 4.75% notes due 2027 and $650 million of 5.25% notes due 2034. This debt issuance allows Quanta to refinance existing short-term debt, particularly from its recent Cupertino Electric acquisition.

The pricing slightly below par (99.818% and 99.409%) suggests moderate demand, reflecting current market conditions. The longer-term nature of this debt (3 and 10 years) provides Quanta with extended financial flexibility but also locks in interest rates for a considerable period. Investors should monitor how this impacts Quanta's interest expenses and overall debt profile going forward.

Market Research Analyst

The successful pricing of Quanta's senior notes offering demonstrates strong market confidence in the company's financial position and growth prospects. The involvement of major financial institutions as joint book-running managers further validates this sentiment. However, investors should note that this offering increases Quanta's long-term debt obligations.

The use of proceeds to repay short-term debt, including that from the Cupertino Electric acquisition, suggests a strategic shift towards longer-term financing. This move could potentially improve Quanta's financial stability and provide more predictable cash flows. The market's reception to this offering may also indicate investor appetite for infrastructure-related investments in the current economic climate.

HOUSTON, Aug. 7, 2024 /PRNewswire/ -- Quanta Services, Inc. (NYSE: PWR) ("Quanta") announced today the pricing of its offering (the "Offering") of (i) $600,000,000 aggregate principal amount of 4.75% senior notes due 2027 (the "2027 Notes") at a price to the public 99.818% of their face value, and (ii) $650,000,000 aggregate principal amount of 5.25% senior notes due 2034 (the "2034 Notes" and, together with the 2027 Notes, the "Notes") at a price to the public 99.409% of their face value. The Offering is expected to close on August 9, 2024, subject to the satisfaction of customary closing conditions. Quanta intends to use the net proceeds from the Offering to repay existing indebtedness, including borrowings incurred under its  commercial paper program and its short-term loan facility to finance the cash consideration paid by Quanta in its recent acquisition of Cupertino Electric, Inc.

BofA Securities, Inc., Wells Fargo Securities, LLC, J.P. Morgan Securities LLC, PNC Capital Markets LLC, Truist Securities, Inc. and Citizens JMP Securities, LLC acted as joint book-running managers for the Offering with respect to the 2027 Notes, and BofA Securities, Inc., Wells Fargo Securities, LLC, J.P. Morgan Securities LLC, PNC Capital Markets LLC, Truist Securities, Inc. and BMO Capital Markets Corp. acted as joint book-running managers for the Offering with respect to the 2034 Notes.

The Offering is being made pursuant to an effective shelf registration statement on Form S-3 previously filed with the U.S. Securities and Exchange Commission (the "SEC") on August 2, 2024, and only by means of a prospectus supplement and accompanying base prospectus. Copies of the prospectus supplement and accompanying base prospectus relating to the Offering may be obtained from BofA Securities, Inc., NC1-022-02-25, 201 North Tryon Street, Charlotte, North Carolina  28255-0001, Attention: Prospectus Department, Email: dg.prospectus_requests@bofa.com; Wells Fargo Securities, LLC, 608 2nd Avenue South, Suite 1000, Minneapolis, Minnesota 55402, Attention: WFS Customer Service, Email: wfscustomerservice@wellsfargo.com or toll-free at 1-800-645-3751; J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179, Attention: Investment Grade Syndicate Desk, 3rd Floor, telephone collect at 1-212-834-4533; PNC Capital Markets LLC, toll-free at 1-855-881-0697 or email: pnccmprospectus@pnc.com; and Truist Securities, Inc., 3333 Peachtree Road NE, 9th floor, Atlanta, Georgia 30326, Attention: Prospectus Department, Telephone 1-800 685-4786 or email TruistSecurities.prospectus@Truist.com. You may also obtain these documents free of charge by visiting the Electronic Data Gathering and Analysis Retrieval System (EDGAR) on the SEC's website at www.sec.gov.  

This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any offer, solicitation or sale of the Notes 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.

About Quanta Services
Quanta is an industry leader in providing specialized infrastructure solutions to the utility, renewable energy, technology, communications, pipeline, and energy industries. Quanta's comprehensive services include designing, installing, repairing and maintaining energy, technology and communications infrastructure. With operations throughout the United States, Canada, Australia and select other international markets, Quanta has the manpower, resources and expertise to safely complete projects that are local, regional, national or international in scope.

Forward Looking Statements
This press release (and any oral statements regarding the subject matter of this press release) contains forward-looking statements intended to qualify for the "safe harbor" from liability established by the Private Securities Litigation Reform Act of 1995.  Forward-looking statements include, but are not limited to, statements relating to the anticipated timing of the closing of the Offering and Quanta's intended use of proceeds therefrom, as well as statements reflecting expectations, intentions, assumptions or beliefs about future events and other statements that do not relate strictly to historical or current facts. Although Quanta's management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. These statements can be affected by inaccurate assumptions and by a variety of known and unknown risks and uncertainties that are difficult to predict or beyond Quanta's control, including, among others, those described in the prospectus supplement and accompanying base prospectus relating to the Offering and other risks and uncertainties detailed in Quanta's Annual Report on Form 10-K for the year ended December 31, 2023, Quanta's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024 and any other documents that Quanta files with the SEC. For a discussion of these risks, uncertainties and assumptions, investors are urged to refer to Quanta's documents filed with the SEC that are available through Quanta's website at www.quantaservices.com or through EDGAR at www.sec.gov. Should one or more of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expressed or implied in any forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements, which are current only as of this date. Quanta does not undertake and expressly disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Quanta further expressly disclaims any written or oral statements made by any third party regarding the subject matter of this press release.

Contacts:	Jayshree Desai, CFO	Media – Liz James
	Kip Rupp, CFA, IRC – Investors	FGS Global
	Quanta Services, Inc.	(281) 881-5170
	(713) 629-7600

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SOURCE Quanta Services, Inc.

FAQ

What is the total value of Quanta Services' (PWR) senior notes offering?

Quanta Services' (PWR) senior notes offering totals $1.25 billion, consisting of $600 million in 4.75% notes due 2027 and $650 million in 5.25% notes due 2034.

When is the closing date for Quanta Services' (PWR) senior notes offering?

The senior notes offering for Quanta Services (PWR) is expected to close on August 9, 2024, subject to customary closing conditions.

How does Quanta Services (PWR) plan to use the proceeds from the senior notes offering?

Quanta Services (PWR) intends to use the net proceeds from the offering to repay existing indebtedness, including borrowings from its commercial paper program and short-term loan facility used to finance the recent acquisition of Cupertino Electric, Inc.

What are the interest rates for Quanta Services' (PWR) newly issued senior notes?

Quanta Services (PWR) is issuing 4.75% senior notes due 2027 and 5.25% senior notes due 2034.