Calumet Refinances Shreveport Terminal Assets to Strengthen Financial Position

Calumet Specialty Products Partners refinanced its Shreveport terminal assets, valuing them at $120 million and accessing $80 million in proceeds. The deal will enable the company to repay a portion of its 11% Senior Notes due in 2026. As part of its financial strategy, Calumet initiated a partial redemption notice for $80 million of its outstanding notes. Based on analyst forecasts, the average target price for Calumet Inc is $19.75, implying an upside of 17.07% from the current price of $16.87.

Calumet Specialty Products Partners (NASDAQ: CLMT) has extended and increased the value of its Shreveport terminal asset financing arrangement with Stonebriar Commercial Finance LLC, valuing the assets at $120 million. This transaction provides $80 million in proceeds, which the company plans to use to partially redeem its 11% Senior Notes due in 2026. The new financing carries a cost of capital of 10.75%, slightly lower than the interest rate on the outstanding notes.

The company has issued a notice for a partial redemption of $80 million aggregate principal amount of its outstanding 2026 Notes at a redemption price of par, plus accrued and unpaid interest, with the redemption date set for August 12, 2025. This move is part of Calumet's broader strategy to reduce its debt burden and improve its financial health, which is currently rated as "FAIR" by InvestingPro.

Analysts have noted the strategic significance of this transaction. BofA Securities recently initiated coverage on Calumet, assigning a Buy rating and setting a price target of $15. The average target price for Calumet Inc is $19.75, implying an upside of 17.07% from the current price of $16.87 [3].

Calumet's recent earnings report revealed a significant earnings miss in the first quarter of 2025, with an actual EPS of -$1.87 compared to the projected -$0.38. However, the company surpassed revenue expectations, recording $993.9 million against a forecast of $919.3 million. The company's stockholders recently approved executive pay and elected four Class I directors, reflecting ongoing strategic initiatives and investor interest in Calumet’s growth prospects.

This refinancing aligns with broader trends in the energy sector, where companies are rethinking debt strategies to strengthen their financial footing in the face of volatile markets and higher borrowing costs [2].

References:
[1] https://au.investing.com/news/company-news/calumet-extends-shreveport-terminal-financing-to-120-million-93CH-3945216
[2] https://finimize.com/content/calumet-taps-new-shreveport-financing-to-cut-debt
[3] https://finance.yahoo.com/news/calumet-announces-120-million-extension-115100642.html