Summary
Enterprise Products Partners L.P. (EPD) announced on March 1, 2022, that its operating subsidiary, Enterprise Products Operating LLC (EPO), entered into a new $500 million delayed draw term loan agreement with Wells Fargo Bank, N.A. This facility matures in March 2024 and provides EPO with the flexibility to borrow funds up to the aggregate amount by April 30, 2022, for general company purposes. The borrowings will be at a variable interest rate tied to EPO's senior debt credit rating. This new debt facility is unsecured but is guaranteed by the parent partnership, EPD. The agreement includes standard representations, warranties, covenants, and events of default. Notably, the loan agreement contains provisions that could restrict EPO's ability to pay cash distributions to the partnership if certain default conditions are met. Investors should monitor the utilization of this facility and its potential impact on future distributions.
Key Highlights
- 1EPD's operating subsidiary, EPO, secured a new $500 million delayed draw term loan facility.
- 2The facility matures in March 2024.
- 3Borrowings are available until April 30, 2022, for general company purposes.
- 4The interest rate is variable, based on EPO's senior debt credit rating.
- 5The loan is unsecured but guaranteed by Enterprise Products Partners L.P.
- 6The agreement includes covenants and events of default that could impact distribution payments.
- 7The agreement allows for the facility amount to be reduced if less than the full $500 million is drawn by the deadline.