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Energy Transfer Partners Prices Senior Notes Worth $1.5B


Energy Transfer Partners, L.P. ETP recently declared the pricing of senior notes worth $1.5 billion. The offering is expected to close on Jan 17, 2017.

Out of the $1.5 billion, senior notes worth $600 million are scheduled to mature in 2027. These notes will carry an interest rate of 4.20% and will likely be priced at 99.786% of their face value. The remaining $900 million notes, which are slated to mature in 2047, will carry an interest rate of 5.30% and are estimated to be priced at 99.483% of their face value.

Energy Transfer Partners intends to utilize the proceeds of approximately $1.48 billion from the notes to refinance current maturities and to repay borrowings outstanding under its revolving credit facility.

Over the past year, the Zacks categorized Oil and Gas Production Pipeline-MLB industry has registered an impressive growth of 30.31%. However, shares of Energy Transfer Partners have outperformed the industry by gaining 33.41%.

Dallas, TX-based Energy Transfer Partners is a master limited partnership (MLP) engaged primarily in the gathering, processing, storage and transportation of natural gas through a network of pipelines spanning some 24,000 miles.

Energy Transfer Partners' lofty yield and concerns over its ability to maintain current distribution in the tough business environment raises concerns about the gathering and processing partnership’s prospects. The midstream MLP's dismal earnings surprise history points to its struggles to protect cash flows amid the ongoing commodity price weakness.

As a result, Energy Transfer Partners currently carries a Zacks Rank #5 (Sell), which implies that the stock will underperform the broader U.S. equity market over the next one to three months.

Some better-ranked players from the broader energy sector include Braskem S.A. BAK, Baker Hughes Incorporated BHI and Cheniere Energy Partners, L.P. CQP. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.

In the last quarter, Cheniere Energy Partners posted a positive earnings surprise of 185.71%.

In the last quarter, Baker Hughes Incorporated posted a positive earnings surprise of 65.1%.

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