HOUSTON - Hess Midstream Operations LP, a subsidiary of Hess Midstream LP (NYSE:HESM), has successfully priced $600 million in senior unsecured notes with a 6.500% interest rate, maturing in 2029. The offering, initially announced at $500 million, was upscaled due to investor demand. The private placement targets qualified institutional buyers in the U.S. and certain non-U.S. persons in accordance with international regulations.
The company has stated that the proceeds from the notes will be utilized primarily to pay down existing debt under its revolving credit facility, with any remaining funds earmarked for general corporate purposes. The transaction is expected to be finalized by May 16, 2024, subject to customary closing conditions.
The notes have not been registered under the Securities Act of 1933 or any state securities laws and will not be offered or sold in the United States absent an exemption from such registration requirements.
Hess Midstream LP is a growth-oriented company engaged in midstream operations, including the ownership, operation, development, and acquisition of a variety of assets. These assets provide services to Hess Corporation (NYSE:HES) and third-party customers, focusing on oil, gas, and produced water handling in the Bakken and Three Forks Shale plays in North Dakota.
InvestingPro Insights
As Hess Midstream Operations LP (NYSE:HESM) takes a significant step in optimizing its capital structure with the pricing of senior unsecured notes, investors may find it worthwhile to consider the company's financial health and market performance. According to InvestingPro data, Hess Midstream boasts a robust Market Cap of approximately $7.94 billion USD, showcasing the scale of its operations within the midstream sector.
Reflecting on the company's profitability metrics, the P/E Ratio stands at a notable 15.6, with an adjusted P/E Ratio for the last twelve months as of Q1 2024 at 19.68. This suggests that while the company is trading at a higher valuation relative to its near-term earnings growth, it maintains a strong position in the market. The company's dividend yield as of the latest data is an attractive 7.5%, and with a Dividend Growth of 14.4% over the last twelve months, Hess Midstream continues to reward its shareholders significantly.
InvestingPro Tips indicate that Hess Midstream has raised its dividend for 7 consecutive years, reinforcing the company's commitment to returning value to its investors. In addition, the stock is noted for generally trading with low price volatility, which may appeal to investors seeking stability in their portfolios. For those considering a deeper dive into Hess Midstream's financials and market outlook, InvestingPro offers a range of additional tips, with 11 more available on the platform. To access these insights, investors can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, enhancing their investment strategy with valuable, data-driven guidance.
As the company prepares to finalize the transaction of its senior unsecured notes, interested parties can stay informed on Hess Midstream's performance by visiting https://www.investing.com/pro/HESM for real-time data and expert analysis.
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