FRISCO, TX - Comstock Resources, Inc. (NYSE:CRK) has announced the pricing of its private placement of 6.75% senior unsecured notes due 2029, upsizing the offer to $400 million from the initially proposed $375 million. The notes will be issued at 93% of their par value, with the offering expected to close on April 9, 2024, subject to customary closing conditions.
The net proceeds from the sale, estimated at approximately $365 million after discounts and expenses, are intended to repay part of the outstanding borrowings under the company's bank credit facility, as well as to cover fees and expenses associated with the transaction.
These newly issued notes have not been registered under the Securities Act of 1933 or any state securities laws and will be available only to qualified institutional buyers and non-U.S. persons in accordance with Rule 144A and Regulation S, respectively.
Comstock Resources is an independent natural gas producer, primarily engaged in the development of the Haynesville shale in North Louisiana and East Texas. The company's shares are publicly traded on the New York Stock Exchange.
This financial move comes as part of Comstock's strategy to manage its debt portfolio. It is important to note that the forward-looking statements in the press release are based on current expectations and involve risks and uncertainties that could cause actual results to differ materially.
Investors are reminded that the information is based on a press release statement and that the offering of the notes is not an invitation to the public to invest.
InvestingPro Insights
As Comstock Resources, Inc. (NYSE:CRK) looks to manage its debt portfolio with the recent upsizing of its senior unsecured notes offering, key financial metrics and expert analysis from InvestingPro provide a deeper understanding of the company's current financial health and future outlook.
According to the latest data, Comstock Resources has a market capitalization of $2.66 billion and is operating under a significant debt burden, a situation underscored by an adjusted Price/Earnings (P/E) Ratio of 12.64 for the last twelve months as of Q4 2023. This could be of interest to investors considering the company's strategy to manage its debt.
Moreover, Comstock's Price to Book ratio stood at 1.13, which might appeal to value investors searching for assets that are potentially undervalued compared to their intrinsic worth. However, it's crucial to note that the company is also quickly burning through cash, which is a point of concern highlighted in one of the InvestingPro Tips.
Another tip that investors might find valuable is that Comstock's short-term obligations exceed its liquid assets, indicating potential liquidity risks that should be carefully evaluated.
On a positive note, analysts predict that Comstock will be profitable this year, and the company has been profitable over the last twelve months. This is reflected in a gross profit margin of 55.98% for the same period, suggesting that despite the challenges, the company has maintained a strong ability to generate earnings relative to its revenue.
Investors interested in gaining more insights and tips on Comstock Resources can find additional information, including 5 more InvestingPro Tips, by visiting InvestingPro's dedicated page for Comstock at https://www.investing.com/pro/CRK. To enhance your investment research, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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