8-KLeadership ChangesMaterial AgreementsFinancial Events+2

ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Material Agreement (Sep 12, 2018)

Filed September 12, 2018For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) announced the execution of a new 364-Day Revolving Credit Agreement by its operating subsidiary, Enterprise Products Operating LLC (EPO). This new agreement, effective September 12, 2018, increases the aggregate borrowing capacity to $2.0 billion, with an option to extend to $2.2 billion, up from the previous $1.5 billion facility. The agreement has a term of 364 days and replaces the prior credit facility which matured on September 12, 2018. Proceeds can be used for general corporate purposes including working capital, capital expenditures, and acquisitions. The company also disclosed a Separation Agreement with its former Senior Vice President and Chief Financial Officer, Bryan F. Bulawa. The agreement includes a cash payment of $4.8 million and up to 18 months of medical benefits in exchange for non-disclosure, non-solicitation, and waiver of certain claims. This separation was effective August 24, 2018, and the agreement was finalized on September 11, 2018.

Key Highlights

  • 1New $2.0 billion (extendable to $2.2 billion) 364-Day Revolving Credit Agreement entered into by EPO, replacing a $1.5 billion facility.
  • 2Increased borrowing capacity provides greater financial flexibility for working capital, capital expenditures, and acquisitions.
  • 3The new credit agreement matures on September 11, 2019, with an option to extend into non-revolving term loans for an additional year.
  • 4The credit facility is unsecured but guaranteed by Enterprise Products Partners L.P. (EPD).
  • 5Covenants in the credit agreement include restrictions on distributions if an event of default occurs.
  • 6Separation Agreement reached with former CFO Bryan F. Bulawa, involving a $4.8 million cash payment and medical benefits.
  • 7The former CFO's departure was not due to disagreements regarding business operations, policies, or practices.

Frequently Asked Questions

The new 364-Day Revolving Credit Agreement allows Enterprise Products Operating LLC (EPO) to borrow up to $2.0 billion (or $2.2 billion under certain conditions) for general corporate purposes, including working capital, capital expenditures, and acquisitions. It replaces a previous credit facility with a higher borrowing capacity.

The agreement has a 364-day term, maturing on September 11, 2019, with an option to extend into term loans for an additional year. It carries a variable interest rate, requires a facility fee, and contains customary covenants and events of default. The debt is not secured by collateral but is guaranteed by the parent partnership, EPD.

The separation agreement involves a one-time cash payment of $4.8 million and up to 18 months of medical benefits for the former CFO. While a significant expense, it is presented as a one-time cost related to the departure of a senior officer and does not appear to impact ongoing operations or the company's financial stability.

Yes, the 364-Day Credit Agreement includes provisions that restrict EPO's ability to pay cash distributions to the Partnership if an event of default has occurred and is continuing, or if such distribution would result in an event of default.