Leading supplier of natural gas fuel,
Clean Energy Fuel Corp.
), announced a private offering of convertible senior notes worth
$220 million to qualified institutional buyers. The offering is
expected to close on Sep 16, 2013.
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The senior notes will carry an interest rate of 5.25% per annum
payable semi-annually. According to the company, initial
investors will have a 30-day option to purchase additional notes
amounting to $30 million.
The unsecured senior notes are scheduled to mature on Oct 1,
2018, along with an option for conversion into equity shares. As
per the transaction, 64.1026 shares of common stock per $1,000
principal amount or $15.60 per share of Clean Energy common stock
is the predefined conversion rate for the notes. This reflects a
premium of roughly 25% on the closing price of the stock on Sep
Clean Energy intends to use the expected net proceeds of $213
million (after subtracting the discount given to initial
investors and issue-related expenses) to finance its capital
expenditure and meet other corporate expenses.
For the second quarter of 2013, Clean Energy reported loss per
share of 13 cents, narrower than the Zacks Consensus Estimate of
loss of 23 cents per share. Quarter revenue also increased to
$88.1 million from $69.8 million in the year earlier quarter on
the back of increased delivery of CNG, liquefied natural gas
(LNG), and renewable natural gas (RNG) to customers.
Clean Energy supplies natural gas as an alternative fuel for
vehicles. Its customer base, spread across U.S. and Canada,
includes refuse, transit, ports, shuttle, taxi, intrastate and
interstate trucking, airport and municipal fleet markets.
Seal Beach, Calif.-based Clean Energy currently holds a Zacks
Rank #3 (Hold), implying that it is expected to perform in line
with the broader U.S. equity market over the next one to three
However, one can consider energy firms like
Range Resources Corporation
Magellan Midstream Partners LP
) as attractive investments. All these stocks sport a Zacks Rank
#1 (Strong Buy).