#United States #Houston #Energy Sector #Summit Midstream #SMC

Summit Midstream Corporation's Strategic Move

In a significant step for its financial strategy, Summit Midstream Corporation (NYSE: SMC) has announced the pricing for the offering of an additional $250 million in 8.625% Senior Secured Second Lien Notes due 2029. This new tranche of notes is expected to bolster the company’s capital position while facilitating various corporate initiatives.

Offering Details

Summit Midstream Holdings, LLC, a subsidiary of SMC, has priced these additional notes at 103.375% of par, plus accrued interest from July 26, 2024. These notes will be issued under the same indenture as the previously existing $575 million of similar notes also maturing in 2029, allowing them to form a single series with uniform terms, which is advantageous for both investors and the company alike.

The primary aims of this offering include repaying a portion of outstanding borrowings under its asset-based lending credit facility, alongside meeting various corporate needs including fees and expenses associated with the offering. The offering is anticipated to close around January 10, 2025, contingent on standard closing conditions.

Security and Guarantees

A notable feature of these additional notes is that they will be guaranteed on a senior second-priority basis and will initially be secured on a second-priority basis by collateral that is already pledged for the benefit of the lenders under the ABL Facility. This guarantees a significant layer of security for investors, reflecting the company's commitment to maintaining a robust financial framework.

Regulatory Compliance

It's important to recognize that the offering of these additional notes is being offered exclusively to entities identified as qualified institutional buyers and non-U.S. persons compliant with international regulations. The guarantee will not be registered under the Securities Act or other state securities laws, indicating a cautious, strategic approach to capital raising within regulatory frameworks.

About Summit Midstream Corporation

Summit Midstream Corporation operates within the midstream energy sector, focusing on the development, ownership, and operation of strategically placed infrastructure assets across key U.S. resource basins. The company provides essential services for natural gas, crude oil, and produced water through long-term, fee-based agreements, targeting major shale formations including the Bakken, Niobrara, and Barnett, among others. SMC also holds an investment in the Double E Pipeline, enhancing its reach within interstate natural gas transportation.

With headquarters located in Houston, Texas, Summit Midstream aims to continue evolving its capital structure to support ongoing growth and efficiency across its operations.

Conclusion

The pricing of the additional notes is a strategic move that demonstrates Summit Midstream Corporation's ongoing commitment to enhancing its financial standing while enabling future growth. As it looks to close this offering shortly, investors will be keen to see how effectively the company utilizes these funds to foster development in the essential energy sector.