RAPID CITY, S.D. - Black Hills Corp . (NYSE: NYSE:BKH), a utility company based in Rapid City, South Dakota, has priced a $450 million debt offering of 6.00% senior unsecured notes due January 15, 2035. The closing of the offering is expected on May 16, 2024, pending customary closing conditions.
The company intends to use the net proceeds from this debt offering, along with available cash or potential short-term borrowings, to repay its $600 million outstanding notes that are due on August 23, 2024. If there are remaining funds after this repayment, they may be allocated for general corporate purposes.
Black Hills Corp. serves 1.34 million natural gas and electric utility customers across eight states, including Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming. The company has stated that the offering is available through a prospectus supplement and an accompanying base prospectus filed with the Securities and Exchange Commission (SEC). Interested parties can obtain these documents for free by visiting the SEC's EDGAR website.
The announcement clarifies that this press release should not be interpreted as an offer to sell or a solicitation of an offer to buy any securities. Moreover, no sales will occur in jurisdictions where such an offer, solicitation, or sale would be unlawful before registration or qualification under the securities laws of such jurisdictions.
This news is based on a press release statement, and it includes forward-looking statements as defined by the SEC. Black Hills Corp. states that these statements are based on reasonable assumptions but cautions that actual results could differ due to a number of risks and uncertainties. The company does not take on the obligation to update any forward-looking statements publicly, whether as a result of new information or future events.
InvestingPro Insights
As Black Hills Corp. (NYSE: BKH) navigates the financial waters with its new debt offering, investors and analysts are closely monitoring its market performance and financial health. The company's commitment to shareholder returns is evident, as it has maintained dividend payments for 54 consecutive years, with a current dividend yield of 4.56%. This longstanding reliability in dividend payments underlines the company's financial discipline and investor-friendly approach.
In terms of valuation, Black Hills Corp. is trading at an earnings multiple of 13.94, as per the latest data, which could suggest a potentially attractive entry point for investors seeking value in the utility sector.
Analysts contributing to InvestingPro have highlighted that the company is trading at a high P/E ratio relative to near-term earnings growth, indicating that investors may be paying a premium for earnings that aren't expected to grow as quickly in the near term. This insight is particularly valuable for those looking to balance their portfolio with stable, income-generating assets.
InvestingPro Tips also reveal that Black Hills Corp. is predicted to be profitable this year, which is corroborated by a solid operating income margin of 20.09% over the last twelve months as of Q1 2024. Still, it is important to note that the company's short-term obligations exceed its liquid assets, which may require careful financial management, especially in the context of the newly priced debt offering.
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