Western Refining to Offer Notes - Analyst Blog
12 Marzo 2013 - 1:30PM
Zacks
Oil refiner and marketer
Western Refining Inc. (WNR) intends to make a
private offering of senior notes worth $350 million. These notes
will be due for redemption in 2021. Simultaneously, Western
Refining also announced commencement of a tender offer to purchase
its outstanding 11.250% senior secured notes due 2017, worth $325
million.
Western Refining plans to use the proceeds from notes offering,
together with available cash in hand, to buyback its outstanding
11.250% senior secured notes due 2017 in the tender offer. The
takings will also be utilized to pay solicitation fees, related
expenses, tender premiums and accrued interest on the existing
secured notes.
Western Refining is one of the largest independent oil refiners in
the U.S. with a combined crude oil processing capacity of
approximately 151,000 Bbl/d. A major advantage for the company is
its proprietary access to pipelines, which inhibits lower-cost
competitors from supplying Western Refining's key markets.
The company currently retains a Zacks Rank #3 (Hold), implying that
it is expected to perform in line with the broader U.S. equity
market over the next 1 to 3 months.
Late last month, the company reported better-than-expected fourth
quarter profits due to higher refining margins and strong product
values in Southwest U.S. Western Refining’s earnings per share
(excluding special items) of $1.45 were much higher than prior-year
quarter’s earnings of 50 cents. Earnings were also above the Zacks
Consensus Estimate of $1.37 per share.
However, the inherent volatility of the refining business reduces
the accuracy and reliability of long-term earnings and revenue
estimates. Additionally, results are exposed to unplanned shutdowns
that may have a lingering impact.
There are other oil refiners in the energy sector that offer value
and are worth buying now. These include Phillips
66 (PSX), Marathon Petroleum Corporation
(MPC) and Valero Energy Corporation (VLO). All of
these stocks sport a Zacks Rank #2 (Buy).
MARATHON PETROL (MPC): Free Stock Analysis Report
PHILLIPS 66 (PSX): Free Stock Analysis Report
VALERO ENERGY (VLO): Free Stock Analysis Report
WESTERN REFING (WNR): Free Stock Analysis Report
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