Range Resources (RRC) Update - Jan 6
Posted: Wed Jan 06, 2021 2:47 pm
Range Resources Corporation (RRC, $7.43, Hold; Target $8.00) - Upsized Debt Offering Reduces Liquidity Risk - Michael S. Scialla, energy sector analyst at Stifel
"We view yesterday's upsized $600MM debt issuance announcement as incrementally positive. While we estimate the new notes will add $36MM of annual cash interest expense, improved liquidity should alleviate investors' concern over upcoming debt maturities of $813MM by March 2023. The strategic move essentially staves off a potential liquidity crunch and buys RRC time to improve its balance sheet via FCF, which, by our projections, will be sufficient to retire all of the $218MM of notes due 2022, the remainder of the debt outstanding under the credit facility, and a portion of the $532MM notes due in 2023."
"We view yesterday's upsized $600MM debt issuance announcement as incrementally positive. While we estimate the new notes will add $36MM of annual cash interest expense, improved liquidity should alleviate investors' concern over upcoming debt maturities of $813MM by March 2023. The strategic move essentially staves off a potential liquidity crunch and buys RRC time to improve its balance sheet via FCF, which, by our projections, will be sufficient to retire all of the $218MM of notes due 2022, the remainder of the debt outstanding under the credit facility, and a portion of the $532MM notes due in 2023."