Here is why Kinetik dropped 50%

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on Jun 13, 2022
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  • Kinetik completes a comprehensive refinancing
  • Kinetik has a fully unsecured financial structure
  • Kinetik completes its 2 to 1 share split

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Kinetik Holdings Inc. (NASDAQ: KNTK) shares lost 50% after announcing the successful completion of a comprehensive refinancing that consists of a new 5-year $1.25B unsecured revolving credit facility, a 3-year $2B unsecured term loan A facility, and also a $1B 5.875% sustainability linked senior notes expected in 2030.

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Kinetik has a fully unsecured financial structure

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Now Kinetik has a completely unsecured financial structure due to the Refinancing. Kinetik put the Refinancing’s net proceeds into repayment and retirement of all current aggregated credit facilities, and it plans to fully redeem the Series A Preferred by the end of 2022.

Kinetik Holdings LP, the company’s affiliate, has completed the earlier disclosed $1B sustainability-linked senior notes maturing in 2030 (the “Senior Notes”). The company completely and unreservedly guarantees the Senior Notes. The Senior Notes are due on June 15, 2030, and will pay an interest rate of 5.875% yearly. They are payable annually on June 15 and December 15 of every year. On December 15, 2022, the initial interest payment shall be made.

CEO and President Jamie Welch said:

We are excited to announce the completion of the comprehensive Refinancing as we believe it materially improves and streamlines Kinetik’s capital structure with no asset level or structurally senior debt as well as solidifies our commitment to achieving Kinetik’s environmental and social sustainability performance targets.

Kinetik’s progress versus sustainability performance criteria linked to methane and greenhouse gas emissions reduction objectives, as well as the presence of women in company officer roles, is tied to the overall Refinancing.

Kinetik completes its 2 to 1 share split

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Finally, per the company’s 2-for-1 share split announcement, Kinetik Class A shares shall commence trading on the NASDAQ beginning Thursday, June 9, 2022, on a split-adjusted basis. Accordingly, an additional Class A common stock was issued for every Class A common share. In addition, holders will get another Class C common share on all outstanding common stock for each Class C common share. Shareholders who will receive the extra shares are those that were on record as of Tuesday, May 31, 2022.

Welch concluded:

Further, through the completion of the stock split, we are excited to enhance shareholder access to our stock and general liquidity in the market.

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