What are the coupon rates and yield-to-maturity on the 2025A and 2025B notes relative to market benchmarks? | ET (Aug 11, 2025) | Candlesense
ET

What are the coupon rates and yield-to-maturity on the 2025A and 2025B notes relative to market benchmarks?

Answer

The press release only tells us that both the 2025A and 2025B junior‑subordinated notes were priced at 100 % of face value. When a bond is issued at par, the coupon rate equals the yield‑to‑maturity (YTM) that investors will earn if they hold the security to maturity, assuming no subsequent price movement. The filing does not disclose the actual coupon percentages, so the exact rates cannot be quoted from the information provided.

Because the notes were sold at par, their YTM will be whatever coupon the company set for each series. In practice, issuers price junior subordinated notes at par only when the coupon is calibrated to sit just above the prevailing market benchmark for comparable high‑yield debt (e.g., the Bloomberg High‑Yield Index or the U.S. Treasury curve for the same maturity). That means the 2025A and 2025B coupons are likely a few basis points higher than the benchmark spread for 30‑year high‑yield issuances—generally in the mid‑6 % to low‑7 % range for a company with Energy Transfer’s credit profile.

Trading implication

  • If the implied YTM is indeed a few basis points above the high‑yield benchmark, the notes offer a modest “yield‑pick” relative to the market, making them attractive for yield‑seeking investors willing to accept junior‑subordinated credit risk.
  • If the benchmark spread narrows (e.g., Treasury yields fall or high‑yield spreads compress), the notes’ price could drift above par, delivering capital‑gain upside while preserving the coupon.
  • Conversely, a widening of high‑yield spreads would push the notes below par, turning the coupon into a more valuable income component but potentially eroding price.

Until the exact coupon percentages are disclosed in the official offering documents, the safest approach is to treat the 2025A and 2025B notes as par‑priced, benchmark‑aligned high‑yield instruments and position accordingly—either buying for yield if you’re comfortable with the junior‑subordinated risk, or holding back until the coupon details are confirmed.

Other Questions About This News

How will the issuance of $2.0 billion in junior subordinated notes affect Energy Transfer’s leverage ratios and credit metrics? What impact will the $2 billion debt issuance have on ET’s share price and short‑term volatility? How does the pricing at 100% of face value compare to recent senior and junior debt offerings in the midstream sector? What are the covenant structures and covenants (e.g., interest coverage, debt‑to‑EBITDA) attached to the Series 2025A and 2025B notes? What is the maturity profile (2056) and call/put features of the junior subordinated notes? How will the proceeds from the $2 billion note issuance be allocated (e.g., debt refinancing, cap‑ex, dividend, share repurchase, acquisitions)? How will this issuance impact Energy Transfer’s credit rating outlook from S&P, Moody’s, and Fitch? What are the potential dilution or equity‑conversion features (if any) that could affect existing shareholders? How does this issuance compare to recent debt offerings by peer mid‑stream companies (e.g., Kinder Morgan, Williams, Enbridge) in terms of size, pricing, and maturity? What are the market’s expectations for future interest‑rate movements and how might they affect the cost of capital for ET? What are the tax and accounting implications of issuing junior subordinated notes for Energy Transfer’s balance sheet?