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CNX Resources (CNX) Prices $500 Million of 6% Senior Notes

CNX Resources Corporation CNX announced that it has priced $500 million of 6% senior notes due 2029. Subject to customary closing conditions, the offering of senior notes will close by end of this month. The company intends to utilize the net proceeds from the same for general corporate purposes, including repayment of existing indebtedness under the revolving credit facility.

Debt to Capital & Liquidity

CNX Resources’ total debt to capital was 37.9% at the end of third-quarter 2020, up from the 2019-end level of 35.8%. The issue of new notes will further increase the company’s debt level to 41.6%.

It does not have any significant debt due before 2026 as it repaid $895 million of senior notes due in 2022 this year. Moreover, the company has significant liquidity of $2.5 billion under its credit facility, which will enable it to meet near-term obligations.

Long-Term Plans

CNX Resources expects consolidated E&P capital expenditure to average $300 million annually over the 2022-2026 time period. It expects to generate free cash flow of $515 million annually over the said time period. Strong free cash flow generation will help the company to meet debt obligations during this period, improve liquidity and continue with the share buyback program.

The initiatives undertaken by CNX Resources will enable it to achieve the seven-year target of generating cumulative free cash flow in excess of $3.3 billion. Strong free cash flow generation will help the company to meet debt obligation during the 2020-2026 time period, improve liquidity and continue with the share buyback program. It is efficiently lowering costs and aims to reduce fully burdened costs by 23% over the 2020-2026 time period, which will boost margins.

Price Performance

Shares of CNX Resources have outperformed the industry in the past 12 months.

Zacks Rank & Key Picks

CNX Resources currently has a Zacks Rank #3 (Hold). Some better ranked stocks in the same sector include Ameresco Inc. AMRC, SunPower Corporation SPWR and Noble Corporation NE, each currently having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term (three to five years) earnings growth for Ameresco, SunPower and Noble Corp. is currently projected at 17.5%, 34.5% and 10.9%, respectively.

Ameresco, SunPower and Noble Corp. delivered an average surprise of 68.6%, 49.2%, and 38.9%, respectively, in the trailing four quarters.

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