8-KMaterial AgreementsFinancial EventsExhibits & Filings

ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Material Agreement (Apr 2, 2009)

Filed April 2, 2009For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) announced the execution of a new $200 million Term Loan Credit Agreement by its operating subsidiary, Enterprise Products Operating LLC. This new agreement with Mizuho Corporate Bank, Ltd. effectively replaces a previous Japanese Yen term loan that matured on March 30, 2009. The new loan is unsecured but is guaranteed by the parent Partnership, providing a degree of comfort to investors regarding the obligation. The funds from this term loan are scheduled to be fully drawn on April 3, 2009, with a maturity date set for September 29, 2009. The interest rate is structured as LIBOR plus a spread of 2.875%. While the agreement includes standard representations, warranties, covenants, and events of default, investors should note the relatively short-term nature of this financing and the unsecured status of the loan itself, though the corporate guarantee mitigates some of this risk.

Key Highlights

  • 1EPD's operating subsidiary, Enterprise Products Operating LLC, secured a new $200 million unsecured term loan.
  • 2The loan agreement was executed with Mizuho Corporate Bank, Ltd., acting as administrative agent, lender, and sole lead arranger.
  • 3This new loan replaces a maturing Japanese Yen term loan.
  • 4The full amount of the $200 million loan will be borrowed on April 3, 2009.
  • 5The loan matures on September 29, 2009, indicating a short-term financing arrangement.
  • 6Interest accrues at a rate of LIBOR plus 2.875%.
  • 7The Partnership (EPD) has provided a corporate guaranty for the loan obligations of its subsidiary.

Frequently Asked Questions

The primary purpose appears to be replacing a maturing Japanese Yen term loan. While the filing doesn't specify the exact use of proceeds beyond replacing debt, it provides immediate liquidity for the operating subsidiary.

No, the loan agreement itself is not secured by any collateral. However, the parent company, Enterprise Products Partners L.P., has provided a Guaranty Agreement, meaning the Partnership guarantees the repayment of the loan.

The interest rate is variable and is set at LIBOR (London Interbank Offered Rate) plus a spread of 2.875% per annum.

This is a short-term financing. The loan will be fully drawn on April 3, 2009, and matures on September 29, 2009, meaning it will be outstanding for approximately six months.