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  "documentTitle": "Essential Utilities, Inc. (WTRG)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2023-03-08 00:00:00",
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  "notes": "The chart shows WTRG equity (blue) vs. debt (white) and a bond index (red) normalized to April 2020.",
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      "text": "When comparing WTRG's long duration debt and equity, there is a clear mismatch in terms of what debt and equity holders think of the Company's earnings prospects.",
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      "kind": "chart",
      "text": "Essential Utilities Stock Price vs. Long-Duration Bond and BBB Corp Bond Index",
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      "text": "bond price: $69",
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      "text": "Shortly after the closing of the Peoples deal on April 13, 2020 WTRG issued a $600 million, 3.35% Baa2/A- rated Senior Unsecured Note due 2050. When comparing WTRG's long duration debt and equity, there is a clear mismatch in terms of what debt and equity holders think of the Company's earnings prospects.(1) WTRG's equity, which is subordinate to the debt, has moderately increased in value, while the debt is trading at approximately $69 with a 5.6% yield. WTRG's dividend yield is 2.6% and the Company effectively has to raise external capital to cover the payments due to growth capital requirements. Raising an additional $1.2 billion of debt would cost the Company ~$27 million more per year of interest expense.",
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      "text": "(1) According to Bloomberg, there has been no change in 2023 consensus earnings estimates from deal closing to present",
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      "kind": "title",
      "text": "Enormous Disconnect Between What Bond And Stock Holders Think of WTRG's Future Post Closing of The Peoples Transaction",
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