Summary
Enterprise Products Partners L.P. (EPD) filed an 8-K on January 8, 2010, to disclose its entry into an underwriting agreement for a public offering of 9,500,000 common units, with an option for up to 1,425,000 additional units to cover over-allotments. The offering, registered under a Form S-3, is scheduled to close on January 12, 2010. The proceeds from this offering are intended to temporarily reduce borrowings under Enterprise Products Operating LLC's (EPO) revolving credit facility, which may then be re-accessed to fund capital expenditures and growth projects, as well as for general partnership purposes.
Key Highlights
- 1EPD announced a public offering of 9.5 million common units, plus a 15% over-allotment option.
- 2The offering is registered under a Form S-3 registration statement.
- 3Proceeds will be used to pay down debt on a revolving credit facility.
- 4The credit facility can be re-borrowed to fund future capital expenditures and growth projects.
- 5The closing of the offering is expected on January 12, 2010.
- 6Underwriters' obligations are subject to customary closing conditions.
- 7Certain underwriters or their affiliates are lenders under EPO's credit facility and will receive a portion of the proceeds.
Frequently Asked Questions
The primary purpose of this 8-K filing is to report Enterprise Products Partners L.P.'s entry into an underwriting agreement for a public offering of its common units.
The net proceeds will be used to temporarily reduce borrowings under Enterprise Products Operating LLC's multi-year revolving credit facility. These funds can then be re-borrowed to finance capital expenditures, other growth projects, and for general partnership purposes.
Yes, affiliates of certain underwriters are lenders under EPO's revolving credit facility, meaning they will receive a substantial portion of the offering's net proceeds. Additionally, some underwriters and their affiliates have provided and may continue to provide investment banking, commercial banking, and advisory services to EPD and its affiliates.
The agreement covers the public offering of 9.5 million common units with an option for over-allotments. The underwriters are obligated to purchase all units if any are purchased, subject to customary conditions. EPD will indemnify the underwriters against certain liabilities, including those under the Securities Act.