Access Midstream Partners, L.P. (ACMP) 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.
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 of Chesapeake Energy Corporation (CHK), 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 (MMP) and Spectra Energy Partners, LP (SEP), each carrying a Zacks Rank #2 (Buy).
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