8-KMaterial AgreementsFinancial EventsExhibits & Filings

ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Material Agreement (Nov 20, 2007)

Filed November 20, 2007For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) filed an 8-K on November 20, 2007, reporting the execution of an Amended and Restated Revolving Credit Agreement by its operating subsidiary, Enterprise Products Operating LLC. This new agreement significantly increases the company's borrowing capacity to $1.75 billion, up from the previous $1.25 billion facility. The agreement matures on November 19, 2012, with an option to convert outstanding revolving loans into a one-year term loan. This expansion of credit facilities indicates the company's ongoing financial strategy to support its operations and potential growth initiatives. Investors should note that the credit facility is unsecured but guaranteed by the parent partnership, EPD. The interest rates and fees are variable and tied to Moody's, S&P, and Fitch ratings, with provisions for increased rates if certain borrowing thresholds are exceeded or upon conversion to a term loan. The agreement also allows for potential future increases in borrowing capacity, providing financial flexibility.

Key Highlights

  • 1Enterprise Products Operating LLC entered into an Amended and Restated Revolving Credit Agreement totaling $1.75 billion.
  • 2The new credit facility represents an increase from the previous $1.25 billion agreement.
  • 3The agreement matures on November 19, 2012, with a 'term-out' option to convert to a one-year non-revolving term loan.
  • 4The obligations under the credit agreement are unsecured but guaranteed by the parent, Enterprise Products Partners L.P.
  • 5Interest rates and facility fees are tiered based on the company's credit ratings (Moody's/S&P/Fitch).
  • 6The agreement includes mechanisms for potential increases in the credit facility amount and extensions of the maturity date, subject to lender consent and other conditions.

Frequently Asked Questions

The new $1.75 billion revolving credit agreement significantly enhances EPD's financial flexibility by increasing its available borrowing capacity. This allows the company to fund its ongoing operations, capital expenditures, and potential growth opportunities more effectively. The increased credit line signals confidence in the company's financial health and its ability to manage debt.

No, the obligations under the Restated Credit Agreement are not secured by any collateral. However, they are guaranteed by the parent company, Enterprise Products Partners L.P., providing a layer of assurance to the lenders.

The 'term-out' option allows Enterprise Products Operating LLC to convert outstanding revolving loans into a non-revolving one-year term loan on the maturity date (November 19, 2012). This provides the company with flexibility to manage its debt structure by potentially extending its repayment obligations for a year if needed, although it may come with an increased interest rate spread.

The interest rates (specifically the Eurodollar spread) and facility fees are variable and depend on EPD's credit ratings from Moody's, S&P, and Fitch. The agreement outlines five different rating categories, each with a corresponding spread and fee rate. Additionally, the Eurodollar spread can increase if outstanding loans and letter of credit obligations exceed 50% of the total commitments, and further increases apply upon conversion to a term loan.