DENVER - Antero Midstream Corporation (NYSE: NYSE:AM), a player in the midstream energy sector, announced the pricing of a private placement of senior unsecured notes, aiming to raise $600 million in capital. The notes, with a 6.625% interest rate and maturing in 2032, are expected to be issued at par value on January 16, 2024, provided all customary closing conditions are met.
The company anticipates net proceeds of approximately $593 million after accounting for initial purchaser discounts and estimated expenses. The primary purpose for these funds is to repay existing debts under Antero Midstream's revolving credit facility. This repayment strategy allows the company the flexibility to reborrow funds for various corporate requirements, including the settlement of upcoming debt maturities.
The notes have not been registered under the Securities Act of 1933 or any state securities laws. Consequently, they may not be offered or sold within the United States absent registration or an exemption from such requirements. The offering targets qualified institutional buyers, relying on Rule 144A under the Securities Act, and is also extended to certain non-U.S. persons in offshore transactions in accordance with Regulation S under the same act.
Antero Midstream, incorporated in Delaware, is known for its network of midstream operations, including gathering, compression, processing, and fractionation assets across the Appalachian Basin. The company also manages integrated water assets predominantly servicing Antero Resources (NYSE:AR) Corporation's properties.
InvestingPro Insights
As Antero Midstream Corporation (NYSE: AM) secures its financial footing through the private placement of senior unsecured notes, investors monitoring the midstream energy sector can glean additional insights from InvestingPro. With a focus on high earnings quality, Antero Midstream's free cash flow has consistently exceeded its net income, suggesting a robust financial health that supports its debt repayment strategy. Furthermore, the company's ability to maintain dividend payments for an extended period, now at 26 consecutive years, underscores its commitment to shareholder returns, a reassuring signal for income-focused investors.
InvestingPro data highlights a market capitalization of $14.55 billion USD and a P/E ratio of 18.33, which, when coupled with a PEG ratio of 0.43 for the last twelve months as of Q3 2023, points to a stock that may be undervalued relative to its near-term earnings growth potential. Additionally, a strong gross profit margin of 92.39% in the same period provides evidence of the company's operational efficiency.
With these considerations in mind, coupled with the fact that analysts predict sales growth for the current year, Antero Midstream's financial strategy appears sound. For those interested in a deeper dive, there are 10 additional InvestingPro Tips available, offering a comprehensive analysis of the company's financial health and future prospects. To access these insights and more, consider an InvestingPro subscription, which is now on a special Cyber Monday sale with discounts of up to 60%. Moreover, use coupon code ProW345 to get an additional 10% off a 2-year InvestingPro+ subscription.
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