8-KOther EventsExhibits & Filings

ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Corporate Update (Jul 19, 2006)

Filed July 19, 2006For Securities:EPDEPDU

Summary

This 8-K filing by Enterprise Products Partners L.P. (EPD) reports on the successful closing of a public offering of $300 million in 8.375% Fixed/Floating Rate Junior Subordinated Notes due 2066, issued by its subsidiary, Enterprise Products Operating L.P., and guaranteed by the parent partnership. The offering closed on July 18, 2006, following an underwriting agreement signed on July 13, 2006. These notes, referred to as LoTSSM, are subordinated debt and include provisions for interest payment deferrals for up to ten years under certain conditions. Investors should note the key terms of the Indenture governing these notes, which restrict distributions on EPD's equity securities or payments on parity or subordinate debt if interest payments are deferred or if an event of default occurs. Additionally, a Replacement Capital Covenant restricts the repurchase of these notes unless funded by specific new securities. The filing also includes various exhibits detailing the underwriting agreement, indentures, opinions, and the replacement capital covenant, providing transparency on the terms and conditions of this new debt issuance.

Key Highlights

  • 1EPD's subsidiary, Enterprise Products Operating L.P., successfully issued $300 million in 8.375% Fixed/Floating Rate Junior Subordinated Notes due 2066 (LoTSSM).
  • 2The LoTSSM are guaranteed on a subordinated basis by the parent company, Enterprise Products Partners L.P.
  • 3The offering closed on July 18, 2006, with the underwriting agreement dated July 13, 2006.
  • 4The notes allow for deferral of interest payments for up to ten consecutive years, subject to specified conditions.
  • 5The Indenture includes covenants that restrict distributions on EPD's equity and payments on parity or subordinate debt if interest is deferred or an event of default occurs.
  • 6A Replacement Capital Covenant imposes restrictions on repurchasing these notes, requiring proceeds from specific new securities.
  • 7The filing includes detailed exhibits concerning the underwriting agreement, indentures, legal opinions, and the replacement capital covenant.

Frequently Asked Questions

This 8-K filing announces the closing of a $300 million public offering of junior subordinated notes by Enterprise Products Operating L.P., with a guarantee from the parent partnership, Enterprise Products Partners L.P. It details the terms of the notes and related agreements.

The LoTSSM are subordinated debt with an 8.375% interest rate, maturing in 2066. A significant feature is the ability for the issuer to defer interest payments for up to ten consecutive years under certain conditions. The notes are guaranteed on a subordinated basis by Enterprise Products Partners L.P.

While the deferral feature can provide EPD with financial flexibility, it also means investors may not receive interest payments for extended periods. The Indenture restricts distributions on EPD's equity and payments on other junior or parity debt if interest payments on the LoTSSM are deferred or if an event of default occurs, indicating that these notes are subordinate to many other obligations in a stressed scenario.

The Replacement Capital Covenant is an agreement designed to protect holders of the LoTSSM. It generally prevents Enterprise Products Operating L.P. from redeeming or repurchasing these notes unless the repurchase is funded by the proceeds from issuing certain other securities. This aims to ensure the notes remain outstanding and are not retired prematurely in a way that could harm existing noteholders.