8-KFinancial EventsExhibits & Filings

ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Financial Obligation (Dec 21, 2005)

Filed December 21, 2005For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) filed an 8-K report on December 21, 2005, detailing a significant event related to its joint venture, Cameron Highway Oil Pipeline Company. On December 15, 2005, Cameron Highway completed a private placement of $415 million in senior secured notes due in December 2017. These notes were issued to refinance existing debt for the Cameron Highway pipeline system. EPD, through its indirect subsidiary, holds a 50% stake in Cameron Highway, with the remaining 50% owned by subsidiaries of Valero Energy Corporation. The new notes are secured by various assets, including those of Cameron Highway and certain rights-of-way related to an EPD subsidiary. Importantly, the notes do not provide recourse to the broader assets of Enterprise Products Partners L.P. or its other subsidiaries, except for letters of credit provided by EPD's operating subsidiary and Valero to a debt service reserve account.

Key Highlights

  • 1Cameron Highway Oil Pipeline Company, a 50% EPD joint venture, issued $415 million in senior secured notes maturing in December 2017.
  • 2The notes were issued to refinance existing debt of the Cameron Highway pipeline system.
  • 3The joint venture is with Valero Energy Corporation, with each party holding a 50% stake.
  • 4The notes are secured by assets of Cameron Highway and certain EPD-related rights of way, along with pledges of partnership interests.
  • 5Letters of credit from EPD and Valero subsidiaries are held in a debt service reserve account.
  • 6Noteholders have no recourse to the broader assets of Enterprise Products Partners L.P. or its other subsidiaries.
  • 7The Note Purchase Agreement contains restrictive covenants and defines specific events of default, including financial ratios and operational issues.

Frequently Asked Questions

The main financial event is the completion of a private placement of $415 million in senior secured notes by Cameron Highway Oil Pipeline Company, a 50% joint venture of EPD. These notes mature in December 2017 and were used to refinance the joint venture's existing debt.

EPD indirectly owns a 50% stake in Cameron Highway Oil Pipeline Company through its subsidiary, Cameron Highway Pipeline I, L.P. The other 50% is owned by two subsidiaries of Valero Energy Corporation.

No, the notes are obligations of Cameron Highway Oil Pipeline Company. While EPD has a 50% ownership interest and its subsidiary provided a letter of credit, the Note Purchase Agreement explicitly states that noteholders have no recourse against the broader assets of Enterprise Products Partners L.P. or its other subsidiaries.

Letters of credit, totaling $18,379,199 from each of EPD's operating subsidiary and Valero, were provided and deposited into a debt service reserve account. These can be drawn upon, among other reasons, to cover debt service and other amounts due to noteholders in the event of a default.