HOUSTON – U.S. energy company Crescent Energy Company (NYSE: CRGY) announced plans to issue $750 million of senior notes due 2033 through its subsidiary Crescent Energy Finance LLC. The notes are subject to market conditions and will be issued to qualified purchasers in accordance with certain securities regulations.
The company intends to use the proceeds from the sale of these senior notes primarily to finance its upcoming silver bow Resources (NYSE: ), Inc. Any remaining funds will be used to repay SilverBow’s existing debt following the transaction. In addition, pending specific application, a portion of the proceeds may be used toward a down payment under Crescent’s revolving credit facility.
The proposed notes will be guaranteed on a senior unsecured basis by subsidiaries of the issuer that also guarantee existing notes and indebtedness under its revolving credit facility. The notes and related guarantees will not be registered under the Securities Act or any state securities laws and will be offered only to qualified institutional buyers and persons outside the United States in compliance with applicable law.
If the merger with SilverBow fails to close by May 22, 2025, or if certain adverse conditions arise beforehand, Crescent will be required to redeem all outstanding notes at the initial offering price plus accrued and unpaid interest.
The information provided in this article is based on Crescent Energy’s press release.
In other recent news, Raymond James raised his stock target to $18, citing the beneficial financial impact of the merger. Truist Securities also raised its price target to $20, highlighting expected growth in Crescent Energy’s free cash flow and other important metrics.
SilverBow’s acquisition will make Crescent the second-largest producer in the Eagle Ford (NYSE: ) region, and the transaction is expected to close by the end of the third quarter of 2024.
Additionally, Crescent Energy reported strong financial results for the first quarter of 2024, with record production and strong cash flow. The company beat market expectations, posting higher-than-expected EBITDA and free cash flow and raising its full-year production forecast.
Investment Professional Insights
Crescent Energy Company (NYSE: CRGY ) is currently in the midst of a complex merger with SilverBow Resources, and the company’s financial picture is mixed based on the latest data. The company has a market capitalization of $1.36 billion, and its valuation metrics present a challenging picture. The price-to-earnings ratio for the trailing twelve months to Q1 2024 was negative -46.14, reflecting Crescent’s struggles to maintain profitability over the past year. However, a PEG ratio of 0.8 indicates the potential for future earnings growth, with Investment Professional Tips Crescent’s net profit is expected to increase this year.
In terms of operations, Crescent’s gross profit margin remained at a strong level of 54.67%, indicating strong cost control capabilities relative to sales. However, as one report highlights, the company’s financial health is concerning Investment Expert Tips pointed out that Crescent operates under a heavy debt load. This is particularly important as the company plans to issue $750 million in senior notes, which could further impact its leverage. Additionally, the company’s short-term debt exceeds its liquid assets, which may increase liquidity risk in the near term.
There is additional information for investors wishing to delve deeper into Crescent’s financial health and future prospects Investment Professional Tips usable. For example, while the company wasn’t profitable in the last twelve months, analysts predict it will be profitable this year, and three analysts have upgraded earnings in the period ahead. These insights could be valuable in assessing Crescent’s potential for a post-merger financial turnaround.
Interested readers can visit InvestingPro to find more detailed analysis and tips on Crescent Energy. Additionally, readers can also use coupon codes PRONEWS24 Subscribe yearly or yearly to Pro and Pro+ for an additional 10% discount, unlocking a total of 7 investment expert tip Provide further guidance on investing in Crescent Energy.
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