Summary
Enterprise Products Partners L.P. (EPD) announced on January 7, 2009, an underwritten public offering of 9,600,000 common units, with an option for an additional 1,440,000 units to cover over-allotments. The offering, registered under the Securities Act of 1933, was set to close on January 12, 2009. The primary purpose of this offering is to raise capital to temporarily reduce outstanding borrowings under the Partnership's revolving credit facility. These funds can be re-borrowed for future capital expenditures and growth initiatives, as well as for general partnership purposes. Notably, affiliates of some underwriters are lenders under EPD's credit facility, meaning they will receive a portion of the offering proceeds.
Key Highlights
- 1EPD is conducting a public offering of approximately 9.6 million common units, with an option for over-allotment.
- 2The offering is expected to close on January 12, 2009.
- 3Proceeds will be used to reduce existing debt under the company's revolving credit facility.
- 4The credit facility can be re-utilized for future capital expenditures and growth projects.
- 5Affiliates of some underwriters are lenders under EPD's credit facility, indicating a potential conflict of interest or a dual role.
- 6The underwriting agreement contains customary conditions, including legal approval and the obligation for underwriters to purchase all units if any are purchased.
- 7EPD will indemnify the underwriters against certain liabilities, including those under the Securities Act.
Frequently Asked Questions
The primary purpose is to raise capital to temporarily reduce outstanding borrowings under Enterprise Products Partners' multi-year revolving credit facility. The funds can be re-borrowed later to finance capital expenditures and growth projects, and for general partnership purposes.
The offering consists of 9,600,000 common units, with an option to purchase up to an additional 1,440,000 common units to cover over-allotments. The closing of the issuance and sale was scheduled for January 12, 2009.
Yes, affiliates of certain underwriters are lenders under Enterprise Products Partners' multi-year revolving credit facility. This means these entities will receive a portion of the net proceeds from the offering as repayment of outstanding debt.
The obligations of the underwriters to purchase the common units are subject to customary conditions, including the approval of legal matters by counsel. Additionally, if the underwriters decide to purchase any units, they are obligated to purchase all of them (subject to the over-allotment option).