NGL - NGL Preferred: Nice Combination Of Income And Upside

2024-01-25 06:38:50 ET

Summary

• NGL Energy Partners is launching a $2.1 billion secured bond offering to refinance its debt and pay accrued distributions on preferred units.
• The preferred units are expected to resume regular distributions, with a yield of approximately 12.8%.
• There is a potential 11% upside from the accrued payment, with the preferred units trading above $25 after distributions are paid.

The Update

NGL Energy Partners ( NGL ) announced the launch of a $2.1 billion secured bond offering split between new five-year and new eight-year bonds. These bonds plus a $700 million loan deal announced last week will refinance all of the company's debt and more importantly, pay the accrued distributions on the preferred units ( NGL.PR.B ) and ( NGL.PR.C ) in short order (I estimate sometime this quarter)....

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