Permian Basin-focused Solaris Midstream Holdings Inc. said it has completed offering $400 million in senior unsecured notes for the first sustainability linked bond (SLB) in the produced water infrastructure industry.
The Houston-based operator, parent company to Solaris Water Midstream LLC, said the notes were a “landmark issuance.” SLBs, which are used for general corporate purposes, underpin environmental, social and governance (ESG) performance indicators. These types of bonds may enable issuers to scale up decarbonization efforts and attract a broader range of investors interested in ESG initiatives.
The transactions “are transformative for Solaris Water on multiple levels and recognize our sustainability efforts to date, positioning us to deliver significant value to our customers, investors, shareholders and other stakeholders,” said Solaris Water CEO Bill Zartler. “We believe our integrated produced water handling and recycling assets, blue-chip customer base and differentiated approach to full-cycle produced water management will continue to distinguish Solaris Water as oil and gas development in the Permian Basin progresses.”
Solaris Water, which has regional offices in the heart of the Permian in Carlsbad, NM, and Midland, TX, constructs and operates handling, recycling, groundwater supply and water management solutions.
“We have been a pioneer in developing recycling infrastructure in the Permian Basin, and this sustainability-linked feature of the notes recognizes Solaris Water’s long-term leadership in full-cycle produced water management,” said Solaris Water COO Amanda Brock.
The notes mature in 2026 and pay an annual interest rate of 7.625%. Proceeds are to be used to repay debt and for general corporate purposes. The transaction simplifies the capital structure and “adds liquidity and flexibility to support additional growth opportunities,” management said.
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