8-KOther EventsExhibits & Filings

ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Corporate Update (Sep 23, 2009)

Filed September 23, 2009For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) announced on September 22, 2009, its intention to conduct a public offering of its common units. The offering includes 7,250,000 common units with an option for underwriters to purchase up to an additional 1,087,500 units to cover over-allotments. This move aims to bolster the partnership's financial flexibility. The net proceeds from this offering are earmarked for the temporary reduction of outstanding borrowings under Enterprise Products Operating LLC's (EPO) revolving credit facility. This debt reduction will free up borrowing capacity, which can then be utilized for future capital expenditures, growth projects, and general partnership needs. It's noteworthy that affiliates of some underwriters are lenders under this credit facility, meaning they will receive a significant portion of the offering's proceeds.

Key Highlights

  • 1EPD is launching a public offering of common units, totaling 7,250,000 units plus a 15% over-allotment option.
  • 2The offering is registered under the Securities Act of 1933 and utilizes a Form S-3 registration statement.
  • 3Proceeds will be used to pay down debt under EPO's revolving credit facility.
  • 4The debt repayment is temporary, with the credit facility available for re-borrowing to fund growth and capital expenditures.
  • 5Affiliates of certain underwriters are lenders under the credit facility and will benefit from the debt repayment.
  • 6The underwriting agreement includes customary conditions and indemnification clauses.
  • 7The offering is expected to close on September 25, 2009.

Frequently Asked Questions

The primary purpose of this offering is to raise capital to temporarily reduce borrowings under Enterprise Products Operating LLC's (EPO) revolving credit facility. This debt reduction will improve financial flexibility, allowing the partnership to re-borrow funds for future capital expenditures, growth projects, and general partnership purposes.

EPD is offering 7,250,000 common units. Additionally, there is an over-allotment option for the underwriters to purchase up to 1,087,500 additional common units if demand warrants it, potentially increasing the total offering size.

Yes, the issuance of new common units will dilute existing shareholders' ownership on a percentage basis. However, the capital raised is intended to support future growth and operational flexibility, which could be beneficial for long-term shareholder value.

Yes, there is a potential conflict of interest as affiliates of certain underwriters are lenders under EPO's revolving credit facility. These affiliates will receive a substantial portion of the net proceeds from the offering as the debt is repaid. The filing notes that these underwriters have also performed investment banking and advisory services for EPD in the past.