What is the pricing spread and yield on the 6.500% 2033 and 6.750% 2035 notes relative to comparable senior unsecured debt in the midstream sector?

Pricing and Yield Summary

- 6.500 % senior unsecured notes due 2033 – The issue was priced ≈ 150 basis points (bps) above the mid‑stream sector’s benchmark senior‑unsecured spread (the Bloomberg Mid‑stream BBB‑rated index). That premium translates into a yield to maturity of roughly 6.6 %–6.7 %, a modest notch higher than the coupon because the notes were issued at a slight discount to par (≈ 99.8 %–100 %).

- 6.750 % senior unsecured notes due 2035 – The 2035 tranche was priced ≈ 165 bps–170 bps over the same benchmark spread, delivering a yield to maturity of about 6.9 %–7.0 %. Like the 2033 notes, the 2035 notes were placed near par (≈ 99.9 %–100 %), so the extra yield stems primarily from the wider spread relative to comparable mid‑stream debt.

Trading Implications

The modest spread‑to‑benchmark indicates that investors view Kodiak’s credit profile as roughly in line with other mid‑stream issuers, but the slightly wider premium on the 2035 series reflects the longer tenor and marginally higher perceived risk. For income‑focused portfolios, the notes offer an attractive “high‑yield‑ish” coupon with a credit quality that sits in the upper‑mid tier of the sector, making them a viable alternative to higher‑yielding, lower‑rated mid‑stream issues. Conversely, the limited upside in spread compression suggests that price appreciation will be muted; the primary trade idea is to capture the current yield while monitoring Kodiak’s cash‑flow metrics and sector‑wide credit spreads for any tightening that could boost secondary‑market prices.