PITTSBURGH - CNX Resources Corporation (NYSE:CNX), an Appalachian natural gas company, has launched a tender offer to repurchase all of its 7.250% Senior Notes due in 2027. The offer aims to buy back the outstanding notes at a purchase price to be determined by a fixed spread plus the yield of a referenced U.S. Treasury Security.
The company has stated that the purchase price for the notes, which have an outstanding principal amount of $350M, will be calculated based on the yield to March 14, 2024, using the bid-side price of the 0.250% U.S. Treasury due on March 15, 2024, and assuming redemption on March 14 at a price of 101.813% of the principal amount. Noteholders will also receive accrued and unpaid interest up to the payment date, expected to be February 23, 2024, provided the offer is not extended or terminated earlier.
The tender offer, set to expire at 5:00 p.m. New York City time on February 16, 2024, is contingent upon certain conditions, including the successful completion of a concurrent notes offering by CNX. The company has not made the tender offer conditional on a minimum amount of notes being tendered, and it may be amended, extended, terminated, or withdrawn according to applicable laws.
In conjunction with the tender offer, CNX has also issued a conditional notice to redeem any notes not purchased in the tender offer. The redemption is scheduled for March 14, 2024, at a redemption price of 101.813% of the principal amount, plus any accrued and unpaid interest. This redemption is dependent on the closing of CNX's new notes offering.
J.P. Morgan Securities LLC has been appointed as the Lead Dealer Manager, with TD Securities (USA) LLC serving as the Co-Dealer Manager for the tender offer. Questions regarding the tender offer may be directed to J.P. Morgan Securities LLC.
This initiative is part of CNX's financial strategy to manage its debt portfolio. The company, with a history dating back 160 years, focuses on natural gas development, production, midstream operations, and technology, holding 8.74 trillion cubic feet equivalent of proved natural gas reserves as of December 31, 2023.
The information in this article is based on a press release statement from CNX Resources Corporation.
InvestingPro Insights
As CNX Resources Corporation (NYSE:CNX) navigates its financial strategy with the recent tender offer to repurchase its senior notes, the company's market performance and analysts' expectations provide a broader context for investors. According to InvestingPro data, CNX's market capitalization stands at $3.56 billion, reflecting the company's overall market value. The P/E ratio, a measure of the company's current share price relative to its per-share earnings, is notably low at 2.2, with an even lower adjusted P/E ratio for the last twelve months as of Q4 2023 at 1.84. This suggests that the company is trading at a low earnings multiple compared to its peers.
InvestingPro Tips reveal that management has been actively involved in share buybacks, which can signal confidence in the company's future and potentially support the share price. However, it's important to note that analysts have revised their earnings downwards for the upcoming period, indicating potential concerns about CNX's future profitability. Additionally, while the company is expected to be profitable this year, there is an anticipation of a sales decline in the current year.
For investors considering CNX's financial maneuvers, such as the tender offer and the potential impact on the company's debt profile and overall financial health, these InvestingPro insights may be particularly relevant. CNX's low price volatility could be seen as a positive sign for risk-averse investors, but the expected drop in net income and sales could be areas of concern.
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