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MarkWest Energy Partners, L.P. Message Board

  • buyandwin buyandwin Jan 7, 2013 10:44 AM Flag

    So what Does This Re-Financing Mean To MWE And The Long Term Unitholders?

    If they can reduce the overall interest rate about 2% per year that would save about $20M per year or $200 M over the 10 years of the Notes. I'm not sure, but I think it could mean about a free processing plant to MWE and all the profits from that plant going forward also cost nothing.

    Patience the story gets better as we go forward

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    • MarkWest Energy notes price at par to yield 4.5%

      MarkWest Energy Partners today completed an offering of senior notes via bookrunners Barclays, Bank of America, Citi, Goldman Sachs, J.P. Morgan, Morgan Stanley, Natixis, RBC, SunTrust, UBS, USB, and Wells Fargo, according to sources.

      "Pricing came at the tight end of guidance and at the target size of $1 billion."

      Looks like our baby is growing up!

    • A pure play to re-finance the debt in my view it cleans up the balance sheet for a better long term picture. If they have done their homework, long term future revenue growth should cover the debt with more upside overall to earnings. It beats share dilution.

      Sentiment: Buy

    • Some of the proceeds will be retained for projects although we don't know how much yet. So hopefully it also means fewer new units this year.

      • 2 Replies to strum_this
      • Looked up the bonds from the 10Q. There are 81M of the 8.75% bonds outstanding. Also 499M of the 6.5% due 2021 and 700M worth of the 2022 issue outstanding. Thus this looks more like a pure refi. Do not know the call terms on the 2021/22 bonds but suspect some small premium required.


      • They are refinancing using most of the total. This means that of the $1B-1.5B in capital they needed to raise they have part done. It should not change anything about issuing more units since MWE needs to raise $$ in about a 50/50 mix of equity and debt. This covers some of the debt - none of the equity.

        There is indeed a significant savings that is offset a bit with the 2-3% cost of issuing the new debt and any costs for buying back the old, but in all a very good move. The rate suggests they are getting closer to the diamond of investment grade. That is what REALLY MATTERS because then they can issue 30 year debt. The rate is not much lower but they save big time on issuing costs and can lock in longer term.


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