CorEnergy Infrastructure Trust, Inc. (NYSE: CORR, CORRPrA):
Pinedale Liquids Gathering System Equity Buy-Out and Debt
Refinancing
CorEnergy Infrastructure Trust, Inc. (“CorEnergy” or the
“Company”) announced today that it has agreed to purchase the
18.95% equity interest, currently held by The Prudential Insurance
Company of America and managed by Prudential Capital Group
(“Prudential”), in its Pinedale Liquids Gathering System for $32.8
million. Concurrently, Prudential will provide $41 million of asset
level debt financing, which will be utilized to pay off the
existing Pinedale, LP credit facility balance and CorEnergy will
utilize its pro-rata proceeds from the repayment of the credit
facility to fund the purchase of Prudential’s equity interest. The
new debt financing provided by Prudential will be a fixed rate
5-year term loan facility. These transactions, while subject to the
execution of definitive loan documents and standard closing
conditions, are expected to close prior to December 31, 2017.
CorEnergy believes the transactions will be modestly accretive
to net income and adjusted funds from operations (AFFO), with
potential for further upside from participating rents.
“We are encouraged by the recent announcements by Ultra
Petroleum of its success with horizontal drilling tests in the
Pinedale Anticline, potentially extending the life of the field,”
said CorEnergy Chief Executive Officer Dave Schulte. “Prudential
has been a great partner on this investment and we are pleased they
intend to remain involved in our debt financing at the asset level.
Their funding allows CorEnergy to preserve its borrowing capacity
for future acquisitions, with current liquidity of approximately
$146 million.”
Capitalization Structure Adjusted for
Equity Buy-Out and Debt Refinancing
September 30, 2017
September 30, 2017,As adjusted
(in millions) Debt Secured credit facilities Current Pinedale
facility1 $7.5 - New Prudential facility - $41.0 Revolver balance
10.0 10.0 Unsecured convertible notes, proceeds gross of fees 114.0
114.0
Total debt $131.5 $165.0 Equity
Perpetual Preferred stock 130.0 130.0 Common stock & additional
paid in capital 341.7 336.5
Total CORR equity $471.7
$466.5 Non-controlling interest $27.6 -
Total capitalization $630.8 $631.5
1)
Represents Prudential’s share of the
principal balance. CorEnergy’s share of the principal,
approximately $32 million, is eliminated in consolidation.
Utilities Energy Service Contract for Fort Leonard
Wood
CorEnergy also announced today it was selected for a Utilities
Energy Services Contracting (UESC) program at Fort Leonard Wood in
south-central Missouri. The Company’s Omega Pipeline currently
serves that United States Army post with natural gas distribution
services, and the UESC program will provide comprehensive natural
gas, electricity and water efficiency improvements.
CorEnergy expects the final contract will be signed in early
2018, at which time the Company will begin work with multiple
highly qualified, UESC experienced subcontractors to identify,
propose and implement a number of initiatives to reduce energy
costs and water usage. Such projects may include construction of
new cogeneration facilities, boiler control improvements,
transformer replacements, interior and exterior lighting
replacements and control improvements.
“We believe this initiative could last between four and five
years and produce incremental earnings for our company,” said Rick
Kreul, President of MoWood, LLC, which oversees the Omega Pipeline.
“The program is part of an initiative by the U.S. Department of
Defense to promote projects whose future energy cost savings will
outweigh the short-term investments. We will announce any material
contract awards under the program.”
About CorEnergy Infrastructure Trust, Inc.
CorEnergy Infrastructure Trust, Inc. (NYSE: CORR, CORRPrA) is a
real estate investment trust (REIT) that owns essential energy
assets, such as pipelines, storage terminals, and transmission and
distribution assets. We receive long-term contracted revenue from
operators of our assets, primarily under triple-net participating
leases. For more information, please visit corenergy.reit.
About Prudential Capital Group
Prudential Capital Group has been a leading provider of private
debt, mezzanine and equity securities to companies globally for
more than 75 years. Managing a portfolio of nearly $82 billion as
of September 30, 2017, Prudential Capital offers senior debt and
mezzanine capital, leveraged leases, credit tenant leases, and
equipment finance to companies, worldwide. The global regional
office network has locations in Atlanta, Chicago, Dallas,
Frankfurt, London, Los Angeles, Milan, Minneapolis, Newark, New
York, Paris, San Francisco and Sydney*. For more information,
please visit prudentialcapitalgroup.com.
*Operates through PGIM (Australia) Pty Ltd.
Forward-Looking Statements
This press release contains certain statements that may include
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements, other than statements of
historical fact, included herein are "forward-looking statements."
Although CorEnergy believes that the expectations reflected in
these forward-looking statements are reasonable, they do involve
assumptions, risks and uncertainties, and these expectations may
prove to be incorrect. Actual results could differ materially from
those anticipated in these forward-looking statements as a result
of a variety of factors, including those discussed in CorEnergy's
reports that are filed with the Securities and Exchange Commission.
You should not place undue reliance on these forward-looking
statements, which speak only as of the date of this press release.
Other than as required by law, CorEnergy does not assume a duty to
update any forward-looking statement. In particular, any
distribution paid in the future to our stockholders will depend on
the actual performance of CorEnergy, its costs of leverage and
other operating expenses and will be subject to the approval of
CorEnergy's Board of Directors and compliance with leverage
covenants.
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version on businesswire.com: http://www.businesswire.com/news/home/20171204006166/en/
CorEnergy Infrastructure Trust, Inc.Investor
RelationsLesley Schorgl, 877-699-CORR (2677)info@corenergy.reit
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