Enerflex Ltd. (NYSE: EFXT) has launched a private offering of $400 million in senior unsecured notes due 2031, with proceeds combined with borrowings under its secured revolving credit facility to redeem in full the outstanding 9.000 % senior secured notes due 2027. The redemption is contingent on the completion of the new offering and is scheduled for December 11, 2025 at a price of 102.25 % of principal plus accrued interest.
The 2027 notes, which carried a 9.000 % coupon, were issued in 2023 and represent a higher‑cost component of Enerflex’s debt stack. By replacing them with the 2031 notes, the company expects to lower its overall interest expense and extend its debt maturity profile. The redemption price of 102.25 % reflects the market premium for the older notes and aligns with the company’s goal of fully deleveraging the 2027 tranche.
Enerflex’s debt‑reduction program has already lowered its bank‑adjusted net debt‑to‑EBITDA ratio to roughly 1.3× at the end of Q2 2025, down from 1.5× in Q1 2025 and 1.6× in Q4 2024. Net debt fell from approximately $700 million in September 2024 to $584 million by the end of Q3 2025, driven by the partial redemption of $62.5 million of the 2027 notes in October 2024 and the current $400 million offering. The new notes are expected to further reduce interest expense, freeing cash that can be deployed toward the company’s U.S. contract‑compression fleet expansion, which is targeting over 475,000 horsepower by year‑end 2025.
Management highlighted that the refinancing strengthens Enerflex’s balance sheet and supports its strategic growth initiatives. CFO Preet Dhindsa noted that the company remains on track to reach its target leverage range of 1.5× to 2.0× and that the additional liquidity will allow continued investment in high‑margin contract‑compression projects while also supporting a recent 13 % increase in the quarterly dividend to CAD 0.0425 per share.
The move underscores Enerflex’s disciplined capital discipline and its commitment to returning value to shareholders through debt reduction and potential future dividend enhancements, while positioning the company for continued expansion in the natural‑gas compression market.
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