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

Rhea-AI Summary

Genesis Energy, L.P. announced a public offering of $500 million in senior unsecured notes due 2032. The proceeds will be used to redeem existing notes due 2026 and for general partnership purposes. RBC Capital Markets, is leading the offering.

Financial Analyst

Genesis Energy's initiation of a $500,000,000 senior unsecured notes offering is a significant strategic financial move. By aiming to redeem their outstanding 6.250% senior unsecured notes due in 2026, they are effectively managing their debt profile. This could be indicative of an attempt to capitalize on current market conditions to lock in potentially lower interest rates for the long term, depending on the final terms of the new notes. For investors, this is typically viewed as positive if it leads to interest expense savings and improved cash flows, signaling financial prudence. However, one should monitor the interest rate on the new notes, as it will determine the actual cost savings.

Market Research Analyst

The involvement of a leading financial institution like RBC Capital Markets in underwriting the offering suggests confidence in Genesis Energy's creditworthiness. The co-issue with Genesis Energy Finance Corporation and the guarantees by most subsidiaries, with specific exceptions, offer an additional layer of security for investors. It’s important to examine the use of proceeds, as redeeming older, higher-interest debt and funding general partnership purposes could be beneficial for the company's operational flexibility. This could enhance Genesis Energy's position in the midstream energy sector, potentially leading to positive long-term growth prospects for the 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 $500,000,000 in aggregate principal amount of senior unsecured notes due 2032 (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 of the notes to redeem all of our outstanding 6.250% senior unsecured notes due 2026 and the remainder for general partnership purposes, including repaying a portion of the borrowings outstanding under our credit facility.

RBC Capital Markets, 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 RBC Capital Markets, LLC, Attn: HY Capital Markets, 200 Vesey Street, 8th Floor, New York, NY 10281, or by telephone at (212) 428-6200.

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 6.250% senior unsecured notes due 2026.

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/20240505343553/en/

Genesis Energy, L.P.

Dwayne Morley

VP – Investor Relations

(713) 860-2536

Source: Genesis Energy, L.P.

FAQ

What did Genesis Energy, L.P. announce?

Genesis Energy, L.P. announced a public offering of senior unsecured notes due 2032.

How much is the offering for?

The offering is for $500,000,000 in aggregate principal amount.

Who is leading the offering?

RBC Capital Markets, is leading the offering.

Where can I obtain more information about the offering?

You can obtain more information from RBC Capital Markets, or the SEC's website.

What will the proceeds be used for?

The proceeds will be used to redeem existing notes due 2026 and for general partnership purposes.