ONEOK to Sell $7B Notes to Fund Acquisition, Expand Permian Presence

Core Viewpoint - ONEOK Inc. is issuing $7 billion in senior notes to fund acquisitions and general corporate purposes, with a closing date expected around September 24, 2024 [1][2]. Group 1: Senior Notes Offering - The senior notes will be issued in six tranches with coupon rates ranging from 4.25% to 5.85%, and maturity dates spanning from 3 to 40 years [1]. - The net proceeds after deductions are anticipated to be $6.92 billion [1]. Group 2: Utilization of Proceeds - The primary use of the proceeds will be to finance the acquisition of Global Infrastructure Partners' interests in EnLink Midstream, LLC and Medallion Midstream, LLC, along with related fees and expenses [2]. - Remaining proceeds will be allocated for general corporate purposes, which may include repaying outstanding debt or redeeming existing notes [3]. Group 3: Financial Health - ONEOK's times interest earned ratio is 4, indicating sufficient financial flexibility to meet interest obligations despite the increased debt burden from new senior notes [4]. Group 4: Recent Acquisitions - In May 2024, ONEOK acquired a system of NGL pipelines from Easton Energy for $280 million, enhancing connectivity in the Gulf Coast [5]. - The company completed an $18.8 billion merger with Magellan Midstream Partners, L.P. in September 2023, positioning itself as one of the largest oil and natural gas pipeline companies in the U.S. [5]. Group 5: Industry Context - The oil and natural gas pipeline industry is highly competitive, with operators expanding through acquisitions [7]. - Other notable acquisitions in the industry include Energy Transfer's $2.28 billion acquisition of WTG Midstream Holdings LLC and Trace Midstream's acquisition of natural gas assets in the Northern Delaware Basin [8][9]. Group 6: Stock Performance - ONEOK's shares have outperformed the industry, returning 47.4% over the last year compared to the industry's 30.2% [10].