#USA #Mexico City #Bond Offering #Investment-Grade #ESENTIA

ESENTIA Marks a Significant Milestone with its Recent Bond Offering

ESENTIA Energy Development, S.A.B. de C.V. (BMV: ESENTIA) has made a noteworthy entry into the capital markets with its recent completion of a $2 billion bond offering, a significant step that reflects the company's growth and financial stability. This initiative highlights the company’s commitment to strengthening its financial foundation while expanding its operational capacity in the energy sector.

The bond issuance, which consists of two tranches, received overwhelming interest from investors, being oversubscribed by 4.5 times. The offering includes:

• - $1 billion in bonds with a coupon rate of 6.125%, maturing in 2033.
• - $1 billion in bonds with a higher coupon rate of 6.5%, maturing in 2038.

This successful issuance is significant not just for the financial figures but also for the benchmark it sets for ESENTIA as it navigates through the complexities of the energy market. With these funds, the company plans to fully repay approximately $2.1 billion in existing project-level debt across four of its operational subsidiaries, consolidating its financial standing and liquidity.

Strengthening Financial Flexibility

As part of its strategy, ESENTIA has also established a $600 million revolving credit facility, enhancing its financial flexibility. This maneuver is poised to streamline operations, enable effective capital utilization, and support the long-term growth strategy of ESENTIA in a rapidly evolving energy landscape.

Daniel Bustos, CEO of ESENTIA, emphasized the importance of this event, stating, "This represents a defining moment for ESENTIA. The refinancing of our project-level debts and their replacement with investment-grade corporate bonds is the culmination of a comprehensive restructuring of our capital framework, initiated with our successful IPO last November."

As the global energy markets face unprecedented demand due to AI-driven advancements and escalating supply risks, ESENTIA stands ready to seize both organic and inorganic growth opportunities, especially in the context of Mexico's energy market.

Credible Ratings Reflect Financial Stability

All three major credit rating agencies have affirmed investment-grade ratings for ESENTIA's new bonds:

• - Moody's: Baa3 with Stable Outlook
• - S&P Global Ratings: BBB– with Stable Outlook
• - Fitch Ratings: BBB– with Stable Outlook

These ratings underscore the reliable cash flow profile supported by long-term take-or-pay contracts in U.S. dollars, highlighting ESENTIA's role as a critical natural gas infrastructure provider in Mexico.

Stephen Griffiths, CFO of ESENTIA, added, “The quality of our investor book reflects the trust placed in our creditworthiness and financial discipline. The seven- and twelve-year maturities extend our debt profile, providing us with the bandwidth to implement our expansion plans and long-term growth strategy.”

A Vision for the Future

ESENTIA’s achievements serve as a robust foundation for future initiatives as it continues to solidify its position as a leading energy player in Latin America. The company operates the Wahalajara system, an extensive pipeline network essential for connecting the Waha Hub in West Texas to major industrial and power generation centers in Central-West Mexico.

With the prospect of continued growth and operational optimization fueled by strategic financial management, ESENTIA is set to navigate the challenges of the energy market adeptly, achieving its mandates while maintaining commitment to its stakeholders and investors.

Through this bond offering, ESENTIA is taking substantial steps towards securing its financial prowess and enhancing its market reliability, marking this venture as one of the major milestones in its corporate journey.

This transaction not only stabilizes ESENTIA's current financial standing but also positions the company for future growth opportunities in an ever-evolving landscape.