HOUSTON - Targa Resources Corp. (NYSE: NYSE:TRGP), a significant player in the midstream energy sector, has priced a substantial public offering of senior notes. The company announced Tuesday that it would offer $1.0 billion in 5.500% Senior Notes due in 2035 at nearly their face value. The offering is scheduled to close on August 9, 2024, contingent on meeting customary closing conditions.
The Houston-based company intends to allocate the net proceeds from this offering to a variety of corporate needs. Specifically, Targa plans to use the funds to repay borrowings under its commercial paper note program. This includes the outstanding $500 million from its previously terminated $1.5 billion unsecured term loan facility that was due in July 2025. The facility was terminated earlier this year in May.
The additional proceeds may serve other corporate purposes, such as repaying other debts, funding capital expenditures, bolstering working capital, and investing in its subsidiaries. These investments are part of Targa's ongoing operations which play a crucial role in the energy supply chain across the United States and internationally, connecting natural gas and natural gas liquids to markets with increasing demand for cleaner fuel options.
Targa's offering is made under an effective shelf registration statement previously filed with the U.S. Securities and Exchange Commission (SEC). The offering is subject to the SEC's rules and will be made available through a prospectus and prospectus supplement.
Targa Resources Corp. is recognized for its expansive portfolio of midstream infrastructure assets, which include services essential to the transportation and delivery of energy. The company's operations encompass natural gas gathering, compression, treatment, processing, transportation, and sales, as well as the transportation, storage, and sale of natural gas liquids and related products.
In other recent news, Targa Resources Corporation reported a record second quarter for 2024, marked by significant growth and the achievement of a record adjusted EBITDA of $984 million. The company's success was driven by increased volumes across its operations and robust performance, particularly in the Permian assets. Targa also announced the appointment of Will Byers as the new Chief Financial Officer and its participation in the Blackcomb pipeline joint venture, projected to cost less than $200 million.
In addition to these developments, the construction of new plants in the Permian Basin and updated growth capital spending estimates for 2024 and 2025 were highlighted. The company also successfully invested in fee-based and fee floor contracts, minimizing exposure to negative gas and low NGL prices. A new share repurchase program worth $1 billion was authorized, following the repayment of its $500 million term loan balance in the second quarter.
Targa's recent developments also include the upcoming operations of the Daytona pipeline in the third quarter, enhancing the company's infrastructure. The company's outlook forecasts substantial growth into 2025, backed by low double-digit percentage volume growth for the current year. According to analysts from Scotiabank and Targa, the company's strategic investments and initiatives, such as the Blackcomb deal, are crucial in ensuring continued growth and stability.
InvestingPro Insights
As Targa Resources Corp. (NYSE: TRGP) embarks on a significant public offering of senior notes, investors are closely monitoring the company's financial health and market position. According to InvestingPro data, Targa Resources currently has a market capitalization of approximately $28.96 billion, reflecting its substantial presence in the midstream energy sector. The company's P/E ratio stands at 27.68, offering a glimpse into its valuation relative to earnings. Notably, Targa Resources has demonstrated a strong commitment to its shareholders, increasing its dividend for 3 consecutive years, and maintaining dividend payments for 14 consecutive years, as highlighted by InvestingPro Tips.
Investors seeking stability may find solace in Targa's low price volatility, a characteristic that can offer some predictability in an otherwise fluctuating market. Additionally, the company's stock is trading near its 52-week high, a testament to its recent performance and investor confidence. For those interested in the company's future profitability, analysts predict that Targa will be profitable this year, which is corroborated by the company's positive performance over the last twelve months.
For further insights and analysis, investors can explore additional InvestingPro Tips for Targa Resources, available at https://www.investing.com/pro/TRGP, which include a total of 13 tips, offering a comprehensive view of the company's financial and market status.
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