HOUSTON & MIDLAND, Texas - Kinetik Holdings Inc. (NYSE: KNTK), a midstream energy company, has secured a $150 million accounts receivable securitization facility with PNC Bank, National Association.
The facility, which is set to mature in April 2025, will have a borrowing base that fluctuates with the company's accounts receivable balance. Interest on the borrowings is pegged to the one-month term SOFR rate plus 90 basis points.
The company plans to allocate the net proceeds from this new credit arrangement to reduce the outstanding debt under its existing Term Loan Credit Facility. This strategic move is expected to bring the Term Loan's balance down to $1.0 billion and extend its maturity to December 8, 2026.
Kinetik Holdings operates in the Delaware Basin and specializes in services for natural gas, natural gas liquids, crude oil, and water, ranging from gathering and transportation to compression, processing, and treating. The company has a significant operational footprint in Midland and Houston, Texas.
This financial maneuver is part of Kinetik's broader strategy to manage its capital and strengthen its balance sheet. The information in this report is based on a press release statement from Kinetik Holdings Inc. It should be noted that forward-looking statements have been made regarding the facility and its potential effects.
These statements are based on current expectations and involve risks and uncertainties, which may cause actual results to differ from projections. Kinetik has not committed to updating any forward-looking statements publicly, even if new information becomes available or other events occur in the future.
InvestingPro Insights
Kinetik Holdings Inc. (NYSE: KNTK) has recently taken a significant step to improve its financial standing by securing a new $150 million accounts receivable securitization facility. The company's strategic financial decisions are reflected in its stock performance and valuation metrics, which offer a comprehensive view of its market position.
According to InvestingPro data, Kinetik boasts a robust market capitalization of $6.13 billion, underlining its substantial presence in the midstream energy sector. The company's P/E ratio stands at a modest 7.58, suggesting that its stock might be undervalued when considering its near-term earnings growth. This is reinforced by the company's PEG ratio for the last twelve months as of Q4 2023, which is a mere 0.12, indicating potential for growth relative to its earnings trajectory.
Investors might also be attracted to Kinetik's significant dividend yield of 7.5%, a testament to its commitment to returning value to shareholders. This is particularly noteworthy in the context of its recent financial decisions aimed at strengthening the balance sheet. Moreover, InvestingPro Tips highlight that Kinetik's stock has experienced a strong return over the last three months, with a 22.76% price total return, and is trading near its 52-week high, at 98.96% of the peak price.
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