Kodiak Gas Services Taps $750M Note Offering to Redeem 2029 Debt and Fund Acquisition
Kodiak Gas Services, LLC launched a private offering of $750 million senior unsecured notes due 2031 to redeem its outstanding 7.25% notes due 2029 at 103.625% redemption price and pay accrued interest. Proceeds alongside its ABL facility will also fund the acquisition of Distributed Power Solutions, LLC.
1. Note Offering Details
Kodiak Gas Services, LLC has launched a private offering of $750 million in senior unsecured notes due 2031, targeting qualified institutional buyers and non-U.S. persons under applicable securities regulations. The notes will not be registered under the Securities Act and carry terms designed to optimize the company’s capital structure through off-balance-sheet financing exemptions.
2. Redemption of 2029 Notes
The issuer plans to use net proceeds from the new notes, together with cash and ABL facility amounts, to redeem all outstanding 7.25% Senior Notes due 2029 at a redemption price of 103.625% plus accrued and unpaid interest. This move will retire higher-cost debt and potentially lower overall interest expense over the next five years.
3. Acquisition Funding
Alongside debt redemption, Kodiak intends to draw on its revolving asset-based loan facility to finance the 100% purchase of Distributed Power Solutions, LLC. The acquisition is expected to expand Kodiak’s service offerings and footprint in natural gas compression and support contract compression services growth.