8-KMaterial AgreementsOther EventsExhibits & Filings

ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Material Agreement (Oct 11, 2018)

Filed October 11, 2018For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) announced the completion of a significant public offering of debt securities on October 11, 2018. The offering comprised three tranches of senior notes issued by its subsidiary, Enterprise Products Operating LLC (EPO): $750 million of 3.50% senior notes due 2022, $1 billion of 4.15% senior notes due 2028, and $1.25 billion of 4.80% senior notes due 2049. These notes are guaranteed by EPD on an unsecured and unsubordinated basis. This action indicates the company's strategy to fund its operations and potentially future growth through debt financing, diversifying its capital structure. Investors should note the specific interest rates, maturity dates, and redemption provisions associated with each note series. The issuance of these new notes, totaling $3 billion, will impact the company's leverage and interest expense. The successful completion of this offering suggests continued investor confidence in EPD's creditworthiness and its long-term business prospects, especially within the midstream energy sector.

Key Highlights

  • 1EPD completed a $3 billion public offering of senior notes by its subsidiary EPO.
  • 2The offering included $750M of 3.50% notes due 2022, $1B of 4.15% notes due 2028, and $1.25B of 4.80% notes due 2049.
  • 3The notes are guaranteed by Enterprise Products Partners L.P.
  • 4The issuance diversifies EPD's debt maturity profile and provides capital for operations or growth.
  • 5Specific redemption provisions, including make-whole premiums and par call options, are detailed for each note series.
  • 6The offering was registered under the Securities Act of 1933 and details are provided via prospectus supplements.
  • 7Legal opinions and consents related to the offering are filed as exhibits.

Frequently Asked Questions

While not explicitly stated, this significant debt offering is typical for midstream energy companies to fund ongoing operations, capital expenditures, potential acquisitions, or to refinance existing debt. It provides Enterprise Products Partners L.P. with substantial capital and diversifies its debt maturity schedule.

The issuance of $3 billion in new debt will increase Enterprise Products Partners L.P.'s total debt and consequently its interest expense. However, it also potentially lowers the company's overall cost of capital if these new notes are issued at favorable rates compared to existing debt or other financing options. Investors should monitor the company's leverage ratios and interest coverage in future filings.

The new notes consist of: $750 million of 3.50% senior notes due February 1, 2022; $1 billion of 4.15% senior notes due October 16, 2028; and $1.25 billion of 4.80% senior notes due February 1, 2049.

Yes, EPO has the option to redeem the notes before maturity. For the 2022 and 2028 notes, there are redemption options at par (100% of principal plus accrued interest) after certain dates. For all note series, EPO can redeem them prior to their maturity dates at a price that includes accrued interest and a 'make-whole' premium, which compensates noteholders for early repayment.