Texas Pacific Land Corporation (NYSE: TPL) has announced the completion of a new $500 million revolving credit facility, substantially enhancing the company's liquidity at attractive rates and terms. The credit facility, which was substantially oversubscribed, bears interest at a per annum rate equal to SOFR plus 2.25% to 2.50% based on TPL’s debt-to-EBITDA leverage ratio.
The credit facility, which was undrawn at close, has a $250 million accordion exercisable if new or existing lenders agree to provide or increase their commitments. It is initially unsecured with a springing security if the total debt-to-EBITDA leverage ratio exceeds 2.50x and matures on October 23, 2029.
Chris Steddum, the CFO of TPL, highlighted the robust support and participation from banking participants, demonstrating the quality of TPL’s business and its exceptional creditworthiness. The company remains committed to maintaining a fortress balance sheet and high-margin business model. The expanded access to low-cost capital better positions TPL to execute on accretive growth opportunities and expand shareholder return of capital.
Texas Pacific Land Corporation, one of the largest landowners in the state of Texas with approximately 874,000 acres of land in West Texas, has its majority ownership concentrated in the Permian Basin. The company's surface and royalty ownership provide revenue opportunities through various means, including fixed fee payments for land use, revenue for sales of materials, oil and gas royalty interests, and revenues related to saltwater disposal, among others.
In the previous period, TPL's liquidity was significantly enhanced through the completion of a new $500 million revolving credit facility, providing the company with expanded access to low-cost capital. The credit facility was substantially oversubscribed and remains undrawn at close, further strengthening TPL’s liquidity position.
The company's commitment to maintaining a fortress balance sheet and high-margin business model remains unchanged, and the expanded access to low-cost capital better positions TPL to execute on accretive growth opportunities and expand shareholder return of capital. Today the company's shares have moved -0.96% to a price of $928.63. If you want to know more, read the company's complete 8-K report here.
