Global Partners LP Announces Private Offering of Senior Notes
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The issuance of $450 million in senior unsecured notes by Global Partners LP represents a strategic move to optimize its capital structure. By electing to repay a portion of its outstanding borrowings under its credit agreement, the firm is likely aiming to take advantage of potentially lower interest rates offered by the Senior Notes compared to its existing debt. This could result in a reduction of interest expense and improve the company's debt maturity profile, which are key factors in enhancing financial flexibility.
Investors and creditors should note that the use of proceeds for general corporate purposes is quite broad and while it may provide the company with liquidity to pursue growth or operational efficiency, it also lacks specificity. The impact on the company's leverage ratio and interest coverage ratio will be crucial metrics to watch in the subsequent financial reporting periods.
The private offering, targeted at qualified institutional buyers, suggests a vote of confidence from institutional investors but also limits the liquidity of these notes due to the restrictions on their sale. The reliance on Rule 144A and Regulation S indicates a strategy to expedite the process and avoid the more rigorous public offering requirements.
The legal framework surrounding the offering of the Senior Notes is critical for potential investors to understand. The notes being unregistered securities under the Securities Act of 1933 and offered in reliance upon Rule 144A and Regulation S, means they are subject to transfer restrictions and primarily directed towards sophisticated investors who are capable of conducting thorough due diligence without the need for the same level of public disclosure as a registered offering.
It is important to note that the unregistered nature of these Senior Notes carries an inherent risk of illiquidity. However, it also allows Global Partners LP to bypass the extensive registration process with the SEC, which can be both costly and time-consuming. The guarantees by certain subsidiaries provide an additional layer of security for the note holders, which could potentially lower the risk premium demanded by investors.
From a market perspective, the issuance of Senior Notes could be interpreted as a signal of Global Partners LP's confidence in its future cash flows and business outlook. It is key for stakeholders to consider the current market conditions, including interest rates and investor appetite for corporate debt. An offering of this size suggests that there is a demand for such financial instruments and that the company believes the market conditions are favorable for raising debt capital.
Furthermore, the allocation of proceeds towards repaying existing debt and for general corporate purposes should be scrutinized in the context of the company's overall strategic plan. Investors will be keen to understand how this capital restructuring aligns with the company's long-term growth initiatives and operational strategies. The market's response to this offering could also serve as a barometer for the financial health and industry standing of Global Partners LP.
The Senior Notes will be offered only to persons reasonably believed to be qualified institutional buyers in reliance upon Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and non-
The Senior Notes have not been and will not be registered under the Securities Act or the securities laws of any state and may not be offered or sold in
This announcement shall not constitute an offer to sell, or the solicitation of an offer to buy, the Senior Notes, nor shall there be any sale of the Senior Notes in any state in which the offer, solicitation, or sale would be unlawful prior to the registration or qualification under the securities laws of any such state.
About Global Partners LP
With approximately 1,700 locations primarily in the Northeast, Global is one of the region’s largest independent owners, suppliers and operators of gasoline stations and convenience stores. Global also owns, controls or has access to a large terminal network—with strategic rail, pipeline and marine assets—spanning from
Forward-Looking Statements
Certain statements and information in this press release may constitute “forward-looking statements,” including statements regarding the intended use of proceeds from the offering. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on Global’s current expectations and beliefs concerning future developments and their potential effect on Global. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting Global will be those that it anticipates. Forward-looking statements involve significant risks and uncertainties (some of which are beyond Global’s control) and assumptions that could cause actual results to differ materially from Global’s historical experience and present expectations or projections. The assumptions and future performance are subject to a wide range of business risks, uncertainties and factors, which are described in our filings with the Securities and Exchange Commission (the “SEC”).
For additional information regarding known material factors that could cause actual results to differ from Global’s projected results, please see Global’s filings with the SEC, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Global undertakes no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
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Gregory B.
Chief Financial Officer
Global Partners LP
(781) 894-8800
Sean T. Geary
Chief Legal Officer and Secretary
Global Partners LP
(781) 894-8800
Source: Global Partners LP
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