ONEOK Partners, L.P.
) announced that it has issued senior notes worth $1.25 billion.
The current offering has three tranches. The first one consists
of 5-year senior notes worth $425 million with coupon rate of
3.2%, the second series covers 10-year senior notes worth $425
million with coupon rate of 5.0% and the third comprises 30-year
senior notes worth $400 million with coupon rate of 6.2%. The
notes offering will close on Sep 12, 2013.
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The net proceeds, after paying the underwriting discounts and
commissions, of the total offering will be $1.24 billion. ONEOK
Partners intends to utilize the proceeds to repay $1.2 billion
due under its commercial paper program and use the rest for
general partnership purposes.
ONEOK Partners issues senior notes and common units from time to
time to accumulate funds for repaying its existing debts and for
several corporate purposes. On Sep 2012, the partnership issued a
total of $1.3 billion of senior notes in two tranches. ONEOK
Partners used the net proceeds of the issue to repay the debts
under the $1.2 billion-commercial paper program and utilized the
rest for general corporate activities.
ONEOK Partners had cash balance of $6.2 million as of Jun 30,
2013. Cash provided by operating activities for the six months of
2013 was $383.5 million. The partnership's current liquidity
position is not sufficient to meet the requirements for reduction
of the existing debt burden.
At the end of second-quarter 2013, credit rating companies
Moody's Investors Service and Standard & Poor's maintained
their long-term debt credit ratings on ONEOK Partners to Baa2 and
BBB, respectively. Moody's reiterated stable outlook on the
partnership; while Standard & Poor's downgraded its outlook
to negative from stable due to weak commodity pricing. Both the
ratings reflect high or sufficient capability to meet financial
obligations. A stable rating enables the partnership to gather
funds from the investors at a reasonable rate, while reducing
cost of debt.
ONEOK Partners currently has a Zacks Rank #2 (Buy). Other stocks
from the industry that are presently performing well include
) with a Zacks Rank #1 (Strong Buy), and
Logistics Partners LP
) with a Zacks Rank #2 (Buy).
Tulsa, Okla.-based ONEOK Partners, a subsidiary of
), is engaged in gathering, processing, storing and transporting
of natural gas in the U.S.