Santos Ltd (ASX: STO) announced the pricing of a US$600 million senior unsecured fixed rate bond transaction in the US$ regulation S Market. The bonds will be issued by the wholly owned subsidiary of Santos, Santos Finance Limited, off the company’s Euro Medium Term Note Programme, and Santos Limited would guarantee the bonds.
The company in its release to the exchange stated that the bonds had been priced at a fixed coupon of 5.25%, for a ten-year period, maturing on 13 March 2029. The company got a good response, and the offering was oversubscribed by five times, and the company received strong support of global asset managers and insurance companies from Asia, Europe, and Australia.
STO intends to use the debt raised for refinancing the US$0.500 billion bridge facility which was used to part-fund the Quadrant Energy acquisition and for general corporate purposes.
The Company’s Managing Director and Chief Executive Officer Kevin Gallagher believes that the offering is in line with the company’s strategy of securing competitively priced long-term capital. He also sees the support from the bond participants as a validation of the company’s growth strategy.
The MD also stated that the bonds would replace the existing two-year bridge facility and is in alignment with the repayment of the balance of the Uncovered ECA facility in March. He believes that all the significant near-term debt maturities have been addressed with more efficient long-term funding.
The bond settlement is expected to happen on 13 March 2019, and the company informed that the Joint Lead Managers on the transaction are ANZ, CBA, and Citi.
The company released its full-year financial report on 21 February 2019. The company witnessed a strong set of numbers. The product sales revenue came in at $3.66 billion in 2018 vs. $3.1 billion in 2017, translating to an 18% change on a year-on-year basis. The company witnessed a 51% increase in EBITDAX for 2018, coming in at $2.16 billion Vs. $1.428 billion in 2017. The underlying profit came in at $727 million in 2018 vs. $318 million in 2017, translating to 129% change on a year-on-year basis. The free cash flow was up 63% at $1.006 billion. The company also stated that all the assets had EBITDAX margins > 45%, aided by continued cost efficiencies, Cooper Basin production costs were down 12% to $8.17/boe.
The stock STO has been in an uptrend in the recent past. The stock has moved up by 26.06%, and 8.72%, in the past three months and one month respectively.
The shares of STO closed the day at A$7.030 on ASX, down by 1.125%, (As on 07 March 2019).
Santos Ltd’s (ASX: STO) market capitalization stands at circa $14.81 billion. The Stock has noted the 52-week high price of A$7.480 and 52-week low price of A$4.800. As per the latest ASX declaration the, company’s EPS stood at 0.428 AUD and dividend yield of 1.88%.
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