Posted on December 17, 2020 by Florian Buschek
Antero Resources AR (disclosure: long) is in the process of further firming up the debt structure
Denver, Colorado, December 17, 2020—Antero Resources Corporation (NYSE: AR) (“Antero Resources”) announced today that, subject to market conditions, it intends to offer $500 million in aggregate principal amount of senior unsecured notes due 2026 (the “Notes”) in a private placement to eligible purchasers.
Antero Resources intends to use a portion of the net proceeds from the offering to fund the redemption of $350 million aggregate principal amount of its 5.125% senior notes due 2022 (the “2022 Notes”) at par plus accrued interest and to use the remaining net proceeds to repay borrowings under its credit facility. The partial redemption of the 2022 Notes is expected to be conditioned on the completion of the offering of the Notes. The offering of the Notes is not contingent upon the completion of such redemption.
This is great news, as it eliminates any risk related to debt and liquidity in the coming years. Maybe they get even a cheaper coupon this time around? Management has done great things with the capital structure recently. They bought back stock very cheap, bought back debt below par, refinanced a big part of the outstanding notes and limited possible dilution down the road. And now we have another sign that they know exactly what they are doing. They have earned the trust of shareholders. The stock is up today and rightly so. This is the final nail in the coffin for the bear thesis.