ONEOK to Issue $7 Billion in Senior Notes
ONEOK, Inc. (NYSE: OKE) announced plans to raise $7.0 billion through a multi-tranche senior notes offering. The financing supports the company’s growth plans and helps sustain day-to-day operations in a changing energy landscape.
Offer Highlights
The company priced a mix of fixed-rate senior notes with staggered maturities. This staggered approach spreads out refinancing needs and gives ONEOK flexibility over time.
Note Mix and Pricing
Here’s the full breakdown of the offering:
- $1.25 billion in 3-year senior notes with a coupon rate of 4.25%.
- $600 million in 5-year senior notes at a coupon of 4.40%.
- $1.25 billion in 7-year senior notes with a coupon of 4.75%.
- $1.60 billion in 10-year senior notes at a coupon of 5.05%.
- $1.50 billion in 30-year senior notes with a coupon of 5.70%.
- $800 million in 40-year senior notes at a coupon of 5.85%.
After underwriting discounts, commissions, and offering expenses, net proceeds are expected to exceed $6.92 billion.
How ONEOK Plans to Use the Proceeds
ONEOK intends to use the bulk of the proceeds to acquire Global Infrastructure Partners’ interests in EnLink Midstream, LLC and Medallion Midstream, LLC. The move aligns with ONEOK’s long-term strategy and is aimed at expanding its reach and capabilities across key midstream assets.
Flexibility for the Remaining Funds
Any remaining amount will go toward general corporate purposes. That may include paying down outstanding debt or redeeming existing notes—steps that can simplify the balance sheet and reduce interest expense over time.
Timing and Conditions
The offering is expected to close on or around September 24, 2024, subject to customary closing conditions. Investors should note that the completion of related transactions and standard approvals can affect timing.
Special Mandatory Redemption
The 3-year, 5-year, and 7-year notes carry a special mandatory redemption feature. If the EnLink transaction doesn’t close by the specified deadline, these notes will be redeemed as outlined in their terms.
Underwriting Team
J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC, and Barclays Capital Inc. are serving as joint book-running managers for the offering, with additional firms acting as co-managers. The syndicate structure helps place the notes across a broad investor base.
About ONEOK
Headquartered in Tulsa, Oklahoma, ONEOK, Inc. (NYSE: OKE) is a leading midstream operator. The company provides gathering, processing, transportation, and storage services through an extensive network that includes more than 50,000 miles of pipelines. Its assets support energy flows that serve both U.S. and international demand.
Frequently Asked Questions
What is ONEOK issuing, and why now?
ONEOK is issuing $7.0 billion in senior notes to fund strategic acquisitions and support ongoing operations. The financing also provides flexibility for general corporate uses.
How are the notes structured?
The offering spans maturities from 3 to 40 years with fixed coupon rates. This mix balances near-term and long-term funding needs.
How much does ONEOK expect to receive after costs?
Net proceeds are expected to exceed $6.92 billion after underwriting discounts, commissions, and offering expenses.
When is the expected closing date?
The offering is expected to close on or around September 24, 2024, subject to customary closing conditions.
Who is managing the transaction?
J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC, and Barclays Capital Inc. are joint book-running managers, with other firms serving as co-managers.
