TULSA, OK – ONE Gas, Inc. (NYSE:OGS) has expanded its existing credit agreement, increasing the total commitments from $1.275 billion to $1.35 billion, according to a recent SEC filing. The modification, effective as of Monday, involves The Huntington National Bank joining as a new lender.
The natural gas distributor entered into a lender joinder and commitment increase agreement on October 11, 2024, amending its second amended and restated revolving credit agreement originally dated March 16, 2021. This arrangement enhances the company's financial flexibility by adding $75 million to its credit facility.
Bank of America, N.A. continues to serve as the administrative agent, swing line lender, and letter of credit issuer. The revised agreement retains all the original terms and conditions.
The lenders involved, along with their affiliates, have previously provided various financial services to ONE Gas and may continue to do so in the future. These services include financial advisory, commercial and investment banking services, for which they receive standard fees and expenses.
Affiliates of the lending parties have also acted as underwriters for the company's past note and equity issuances and may assume similar roles for future financial undertakings. Additionally, some lenders engage as dealers in the company's commercial paper program and participate as managers, forward purchasers, and/or forward sellers in ONE Gas's at-the-market equity program.
In other recent news, ONE Gas Inc. has been the subject of several analyst adjustments and financial developments. Wells Fargo upgraded its rating for ONE Gas from Equal Weight to Overweight, increasing the price target to $80.00, indicating confidence in the company's potential for a more stable earnings forecast. The firm projects a long-term earnings per share growth rate of 5-7% for ONE Gas, based on an estimated 6.5% growth through 2028.
ONE Gas also reported robust first quarter performance for 2024, with net income reaching $99 million, driven by new rates and customer growth. The company has expanded its revolving credit facility by $75 million, bringing the total commitment to $1.275 billion. Additionally, ONE Gas's board of directors declared a quarterly dividend of 66 cents per share, in line with the previously indicated anticipation for the year 2024.
Analysts from Stifel maintained a Hold rating on ONE Gas, but raised the price target to $71, following the company's second-quarter results. Meanwhile, Mizuho revised its price target for ONE Gas to $65, maintaining a neutral stance. These recent developments provide investors with insights into the company's current standing and future prospects.
InvestingPro Insights
ONE Gas's recent credit facility expansion aligns with its strong financial position and growth strategy. According to InvestingPro data, the company boasts a market capitalization of $4.12 billion and has demonstrated consistent profitability with a P/E ratio of 18.44. This financial stability is further underscored by an InvestingPro Tip highlighting that ONE Gas has raised its dividend for 10 consecutive years, reflecting a commitment to shareholder returns.
The company's ability to secure additional credit may be attributed to its solid revenue performance, with $2.05 billion reported in the last twelve months as of Q2 2024. Moreover, an InvestingPro Tip indicates that analysts predict the company will remain profitable this year, which could explain lenders' confidence in extending additional credit.
For investors seeking more comprehensive analysis, InvestingPro offers 5 additional tips that could provide deeper insights into ONE Gas's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.