Access Midstream Partners, L.P.
) announced that it has priced $0.75 billion of 4.875% senior
notes. The notes will mature in 2024. The partnership expects to
close the note offering on Mar 7, 2014, subject to customary
conditions. Initially, Access Midstream Partners had planned to
offer senior notes worth $0.6 billion.
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The partnership intends to utilize the net proceeds to repay
borrowings under its revolving credit facility. Access Midstream
Partners also plans to use the fund for general partnership
functions, including working capital requirements, capital
expenditure needs and acquisition program.
As on Mar 4, 2014, Access Midstream Partners' debt-to-equity
ratio was 74.6%. With the completion of the issue of senior
notes, the partnership's debt-to-equity ratio is expected to
increase in the future.
Access Midstream Partners issues senior notes at regular
intervals to refinance its existing debts and for other corporate
purposes. On Aug 14, 2013, the partnership priced senior notes
worth $0.4 billion. Access Midstream Partners utilized the net
proceeds for several purposes like funding for working capital
needs, repayment of debt and so on.
Apart from exercising external sources to accumulate funds,
Access Midstream Partners continues to maximize its internal fund
profile through driving operating efficiencies. In 2013, the
partnership's net cash from operating activities increased around
77% to $0.56 billion from the prior year.
The utilization of internal funds as well as external money
allows Access Midstream Partners to expand its operations. On Feb
28, 2014, the partnership agreed to acquire some midstream
compression assets from MidCon Compression, L.L.C, a subsidiary
Chesapeake Energy Corporation
), for $0.16 billion. In the long run, the strategic acquisition
will enable the partnership to solidify its operations in the
Utica Shale and Marcellus Shale regions, thereby meeting
increased demand from upstream players.
Access Midstream Partners currently has a Zacks Rank #3 (Hold).
However, some better-ranked stocks in the same industry include
Magellan Midstream Partners LP
Spectra Energy Partners, LP
), each carrying a Zacks Rank #2 (Buy).