- NGL Energy Partners (NYSE:NGL) surged 20.3% in today's trading after unveiling a $2.05B offering of senior secured notes due 2026, which will provide the partnership with ample liquidity and push out some of its debt maturities.
- NGL is looking to take advantage of a bond market that has opened up for risky borrowers, as investors draw confidence from oil prices climbing above $50/bbl, optimistic outlooks on the pandemic and the economy, and react to rising Treasury yields by loading up on higher yielding debt.
- The company has $1.71B outstanding on its credit agreement and a $250M first lien term loan with Apollo, both maturing in October 2021, and a rally in low rated energy bonds has opened a window for a possible refinancing.
- According to Moody's, the notes include a covenant that prevents the company from paying dividends on its common and preferred stock, a cash preservation measure welcomed by investors.
- Earlier this week, NGL said it expects a $380M-$400M non-cash impairment charge for FY 2021 related to certain intangible assets and goodwill from its settlement with Extraction Oil and Gas, as it forecast 2021 adjusted EBITDA of ~$500M.