Summit Midstream Corporation's $250 Million Note Offering Set to Enhance Its Financial Standing
On January 7, 2025, Summit Midstream Corporation (NYSE: SMC) publicly notified stakeholders regarding its initiation of a noteworthy financial operation. The company plans to offer $250 million in additional 8.625% Senior Secured Second Lien Notes, maturing in 2029. This initiative is pursued through Summit Midstream Holdings, LLC, a subsidiary of SMC, positioning itself strategically within the energy sector.
The proposed notes will be issued as part of the same indenture governing the company's pre-existing notes valued at $575 million, which also carry a 8.625% interest rate. They will share identical terms with regard to provisions, except for the issue date and price, creating a unified series that will be managed concurrently with the existing notes.
Purpose of the Offering
This offering is aimed at facilitating substantial financial maneuvers. Specifically, the funds generated will be allocated towards the repayment of outstanding borrowings accrued through the Company's asset-based lending credit facility, recognized as the ABL Facility. Furthermore, these funds will bolster general corporate purposes, covering associated fees and expenses tied to the offering.
An essential aspect of the offering is the guarantees provided, structured on a senior second-priority basis. These will be backed by the existing collateral which serves the current lenders under the ABL Facility, ensuring a robust safety net for investors.
Target Investors
The notes are being marketed specifically to investors who can be classified as qualified institutional buyers under Rule 144A of the Securities Act of 1933. Moreover, non-U.S. purchasers will engage outside of the United States in compliance with Regulation S. This tailored outreach highlights SMC’s strategy to secure significant financial backing from credible market players. As per the current regulations, these notes and their related guarantees will not be registered under the Securities Act, which imposes specific limitations on their sale within the United States unless proper exemptions are fulfilled.
Company Overview
Summit Midstream Corporation operates its core business within the realm of midstream energy infrastructure. The company strategically develops and manages assets across prime resource basins primarily characterized by shale formations. Its operational focus spans several influential areas of the continental U.S., including the Williston Basin in North Dakota, the Fort Worth Basin in Texas, and the Piceance Basin in Colorado, among others. These locations have been pivotal in executing gathering, processing, and transportation services tailored towards natural gas, crude oil, and produced water.
Beyond operational efforts, SMC maintains an equity investment in Double E Pipeline, LLC, enhancing its operational capacities through interstate natural gas transportation services.
Regulatory Environment and Forward-Looking Statements
In compliance with regulatory guidelines, this announcement includes forward-looking statements that underscore expectations regarding upcoming plans and financial outcomes. Such statements may reflect variables concerning the offering of notes and future financial performance. Investors must recognize the inherent risks accompanying forward-looking statements, with uncertainties that could materially influence actual results compared to projections.
SMC continues to strive towards long-term, sustainable growth within the evolving energy landscape. By securing this additional financial resource, the company aims to ensure its position remains robust in an increasingly competitive market. Amidst these efforts, detailed disclosures about risks and uncertainties are provided to potential investors through formal updates and filings with the Securities and Exchange Commission.
The proposed notes will be issued as part of the same indenture governing the company's pre-existing notes valued at $575 million, which also carry a 8.625% interest rate. They will share identical terms with regard to provisions, except for the issue date and price, creating a unified series that will be managed concurrently with the existing notes.
Purpose of the Offering
This offering is aimed at facilitating substantial financial maneuvers. Specifically, the funds generated will be allocated towards the repayment of outstanding borrowings accrued through the Company's asset-based lending credit facility, recognized as the ABL Facility. Furthermore, these funds will bolster general corporate purposes, covering associated fees and expenses tied to the offering.
An essential aspect of the offering is the guarantees provided, structured on a senior second-priority basis. These will be backed by the existing collateral which serves the current lenders under the ABL Facility, ensuring a robust safety net for investors.
Target Investors
The notes are being marketed specifically to investors who can be classified as qualified institutional buyers under Rule 144A of the Securities Act of 1933. Moreover, non-U.S. purchasers will engage outside of the United States in compliance with Regulation S. This tailored outreach highlights SMC’s strategy to secure significant financial backing from credible market players. As per the current regulations, these notes and their related guarantees will not be registered under the Securities Act, which imposes specific limitations on their sale within the United States unless proper exemptions are fulfilled.
Company Overview
Summit Midstream Corporation operates its core business within the realm of midstream energy infrastructure. The company strategically develops and manages assets across prime resource basins primarily characterized by shale formations. Its operational focus spans several influential areas of the continental U.S., including the Williston Basin in North Dakota, the Fort Worth Basin in Texas, and the Piceance Basin in Colorado, among others. These locations have been pivotal in executing gathering, processing, and transportation services tailored towards natural gas, crude oil, and produced water.
Beyond operational efforts, SMC maintains an equity investment in Double E Pipeline, LLC, enhancing its operational capacities through interstate natural gas transportation services.
Regulatory Environment and Forward-Looking Statements
In compliance with regulatory guidelines, this announcement includes forward-looking statements that underscore expectations regarding upcoming plans and financial outcomes. Such statements may reflect variables concerning the offering of notes and future financial performance. Investors must recognize the inherent risks accompanying forward-looking statements, with uncertainties that could materially influence actual results compared to projections.
SMC continues to strive towards long-term, sustainable growth within the evolving energy landscape. By securing this additional financial resource, the company aims to ensure its position remains robust in an increasingly competitive market. Amidst these efforts, detailed disclosures about risks and uncertainties are provided to potential investors through formal updates and filings with the Securities and Exchange Commission.
Topics Financial Services & Investing）
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