Kodiak Gas Service (KGS) Issues More Debt as Shares Slide

Kodiak Gas Services, Inc. has announced the launch of a $750 million senior unsecured notes offering through its wholly owned subsidiary, Kodiak Gas Services, LLC. The company intends to use the net proceeds from the offering to repay a portion of the outstanding indebtedness under its revolving asset-based loan credit facility and to pay related fees, costs, premiums, and expenses in connection with the closing of the company's previously announced acquisition of CSI Compressco LP.

In connection with the closing of the CSI acquisition, Kodiak Gas Services, Inc. plans to use proceeds from additional draws on the asset-based loan facility to repay, terminate, and/or redeem all of CSI's existing long-term indebtedness. The offering of notes will not be registered under the Securities Act of 1933 and may not be offered or sold within the United States, or to or for the account or benefit of any U.S. person, absent registration or an applicable exemption from registration requirements.

Commenting on the announcement, Kodiak Gas Services, Inc. management stated, "We are pleased to announce the launch of this senior unsecured notes offering, which will support our strategic initiatives, including the repayment of existing indebtedness and the financing of the CSI acquisition."

Kodiak Gas Services, Inc. is a leading contract compression services provider in the continental United States, with a focus on serving oil and gas producers and midstream customers in high-volume gas gathering systems, processing facilities, multi-well gas lift applications, and natural gas transmission systems.

In response to the news, the company's shares experienced a -1.3% movement and are currently trading at a price of $23.12.

The company's full 8-K submission is available here.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.