CNX Resources Corporation Announces Private Offering of $400 Million of Senior Notes

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CNX Resources Corporation announces a $400 million private placement of senior notes due 2032 and a tender offer for its 7.250% senior notes due 2027. The company plans to use the proceeds for debt repayment and general corporate purposes.
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The announcement by CNX Resources Corporation regarding the private placement of $400 million in senior notes due 2032 signifies a strategic financial restructuring. By opting to retire the higher-interest 7.250% senior notes due in 2027 through a tender offer and subsequent redemption, CNX is likely aiming to capitalize on potentially lower interest rates for the new issuance, which could result in reduced debt servicing costs over time. This move could enhance the company's financial flexibility and potentially improve net interest margins.

From an investor's standpoint, the transaction could be seen as a positive indicator of management's proactive approach to capital structure optimization. However, the success of this offering is contingent upon market conditions and investor appetite for energy sector debt, particularly in the context of an ultra-low carbon intensive natural gas company like CNX. The environmental angle may attract ESG-focused investors, aligning with growing trends in sustainable investing.

The legal implications of the offering, given its nature as a private placement, are notable. CNX is relying on Rule 144A and Regulation S under the Securities Act to place these notes with qualified institutional buyers and non-U.S. persons, respectively. This reliance on exemptions from the standard registration requirements underscores the need for compliance with specific legal frameworks, which can be complex and require careful navigation to avoid potential legal pitfalls.

Additionally, the redemption of the 2027 Notes is subject to the successful completion of the new offering, which introduces a conditional factor that must be clearly communicated to all stakeholders to avoid any legal misunderstandings. This approach also highlights the importance of the tender offer's terms as set forth in the Offer to Purchase, which governs the conditions under which the 2027 Notes can be tendered.

Examining the broader market implications, CNX's issuance of senior notes is indicative of the company's confidence in its operational competencies, technology development and capital allocation methodologies. The use of proceeds to repay existing debt and for general corporate purposes suggests a strategic allocation of capital that could support CNX's growth initiatives and enhance its competitive position in the Appalachia region.

It is essential to consider the current state of the natural gas market, including supply and demand dynamics, pricing trends and regulatory environment, as these factors can significantly impact the company's future performance. CNX's positioning as an ultra-low carbon intensive natural gas company may provide it with a competitive edge as the global economy increasingly prioritizes sustainability.

PITTSBURGH, Feb. 12, 2024 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX," "we" or "our") today announced that it intends, subject to market and other conditions, to offer and sell in a private placement to eligible purchasers $400 million of senior notes due 2032 (the "Notes"). The Notes will be guaranteed by all of CNX's restricted subsidiaries that guarantee its revolving credit facility.

Concurrently with this offering, we commenced a tender offer (the "Tender Offer") to purchase for cash any and all of our 7.250% senior notes due 2027 (our "2027 Notes") validly tendered and not validly withdrawn. The Tender Offer is made only by and pursuant to the terms of the Offer to Purchase. Additionally, concurrently with this offering and the commencement of the Tender Offer, we issued a conditional notice to redeem all 2027 Notes not purchased in the Tender Offer (the "Redemption"). The Tender Offer and the Redemption are each conditioned on the consummation of this offering.

CNX intends to use the net proceeds of the sale of the Notes to (i) purchase any and all of its outstanding 2027 Notes pursuant to the Tender Offer, (ii) to the extent any 2027 Notes remain outstanding after the Tender Offer, fund the Redemption and (iii) repay borrowings under its revolving credit facility, with any remaining proceeds used for general corporate purposes.

The Notes have not been, and will not be, registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the rules promulgated thereunder and applicable state securities laws. The Notes will be offered only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act and non-U.S. persons in transactions outside the United States in reliance on Regulation S under the Securities Act.

CNX Resources Corporation (NYSE: CNX) is a premier, ultra-low carbon intensive natural gas development, production, midstream, and technology company centered in Appalachia, one of the most energy abundant regions in the world. With the benefit of a 160-year regional legacy, substantial asset base, leading core operational competencies, technology development and innovation, and astute capital allocation methodologies, we responsibly develop our resources and deploy free cash flow to create long-term per share value for our shareholders, employees, and the communities where we operate. As of December 31, 2023, CNX had 8.74 trillion cubic feet equivalent of proved natural gas reserves.

Cautionary Statements:

This press release does not and shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any offer, solicitation or sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The offering of Notes may be made only by means of an offering memorandum. This press release does not constitute an offer to purchase or the solicitation of an offer to sell any 2027 Notes in the Tender Offer, nor does it constitute a notice of redemption under the indenture governing the 2027 Notes.

Various statements in this release, including those that express a belief, expectation or intention, may be considered forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) that involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "will" or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release, including those relating to the offering of Notes and the use of proceeds therefrom, the Tender Offer and the Redemption, speak only as of the date of this press release; we disclaim any obligation to update these statements unless required by securities laws and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the factors discussed in our 2023 Annual Report on Form 10-K under "Risk Factors," which is on file at the U.S. Securities and Exchange Commission.

CNX Resources Corporation logo (PRNewsfoto/CNX Resources Corporation,CNX...)


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SOURCE CNX Resources Corporation

CNX Resources Corporation is announcing a $400 million private placement of senior notes due 2032 and a tender offer for its 7.250% senior notes due 2027.

CNX intends to use the net proceeds to purchase any outstanding 2027 Notes, fund the Redemption for remaining 2027 Notes, repay borrowings under its revolving credit facility, and utilize any remaining funds for general corporate purposes.

No, the Notes have not been and will not be registered under the Securities Act of 1933 and may only be offered to qualified institutional buyers under certain exemptions.

CNX Resources Corporation is focused on ultra-low carbon intensive natural gas development, production, midstream, and technology in Appalachia, with a strong emphasis on long-term per share value creation.
CNX Resources Corp


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About CNX

cnx resources corporation (nyse: cnx) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the appalachian basin. with the benefit of a more than 150-year legacy and a substantial asset base amassed over many generations, the company deploys an organic growth strategy focused on responsibly developing its resources in order to create long term value for its shareholders, employees and the communities where it operates. as of december 31, 2016, cnx had 6.3 trillion cubic feet equivalent of proved natural gas reserves. the company is a member of the standard & poor's midcap 400 index.