Targa Resources Corp. priced a $1.5 billion senior notes offering that consists of two tranches: $750 million of 4.350% notes due 2031 and $750 million of 6.050% notes due 2056. The notes were priced at 99.812% and 99.975% of face value, respectively, and the transaction is expected to close on March 2, 2026 under an effective shelf registration statement filed with the SEC.
The company will use the net proceeds for general corporate purposes, including repaying borrowings under its unsecured commercial paper program, paying down other indebtedness, repurchasing or redeeming securities, and funding capital expenditures, working‑capital additions or investments in subsidiaries. This financing provides Targa with additional liquidity and flexibility to support its significant growth and capital‑expenditure plans, which include approximately $4.5 billion of growth capital spending planned for 2026 and beyond.
Targa’s recent financial performance underscores the strategic importance of the debt issuance. The company reported record full‑year 2025 adjusted EBITDA of $4.96 billion, up 20% from 2024, and Q4 2025 adjusted EBITDA of $1.34 billion, a 5% sequential increase from Q3 2025. The strong earnings base, combined with the company’s focus on expanding infrastructure in the Permian Basin and Eagle Ford Shale, creates a compelling case for the additional capital to fund projects such as the Yeti II processing plant and Fractionator 13.
Management highlighted the company’s momentum and confidence in future growth. CEO Matt Meloy noted that “the completion of our key large downstream capital projects in the second half of 2027 will provide us with meaningful operating leverage and drive Targa’s next transformation, which is an outlook for growing and durable free cash flow supported by our growing fee‑based adjusted EBITDA and strong investment‑grade balance sheet.” The company’s guidance for full‑year 2026 adjusted EBITDA of $5.4 billion to $5.6 billion reflects this confidence.
Analysts have responded positively to the company’s recent earnings, raising price targets in light of the strong performance and the new debt issuance. The market reaction to the debt offering itself was muted, but the pricing at close to par indicates robust demand for Targa’s investment‑grade debt. The combination of a solid credit profile, a BBB issue‑level rating, and a clear growth strategy positions Targa to maintain its financial strength while pursuing its expansion plans.
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