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ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Corporate Update (Jan 4, 2024)

Reports
Other Events·Exhibits & Filings
Filing Date
Filed January 4, 2024
Period End
January 2, 2024
Securities
EPDEPDU
In the record · 2016–202610-K1110-Q328-K128

EPD filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 128 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Sep ’18Sep ’18
  2. Leadership change8-K · Oct ’20Oct ’20
  3. Material agreement8-K · Sep ’22Sep ’22
  4. Material agreement8-K · Jul ’26Jul ’26

01—Abstract

Summary

Summary of the 8-K filed January 4, 2024. Cited figures are marked; the original filing is the authoritative source.

Enterprise Products Partners L.P.

(NYSE: EPD) disclosed in this Form 8-K, filed January 4, 2024, that its operating subsidiary Enterprise Products Operating LLC (EPO) agreed on January 2, 2024 to sell $2.0 billiona of senior unsecured notes in a registered public offering: $1.0 billion of 4.60% notes due January 11, 2027 (issued at 99.897% of par) and $1.0 billion of 4.85% notes due January 31, 2034 (issued at 99.705% of par). The notes are unconditionally guaranteed by the Partnership on an unsecured, unsubordinated basis. Closing is scheduled for January 11, 2024.

The filing is largely a routine debt issuance, with the full terms incorporated by reference from the prospectus and indenture exhibits. The primary use of proceeds is general corporate purposes, including growth capital, and repayment of debt. That includes all or part of the $850 millionb 3.90% Senior Notes JJ maturing in February 2024, plus amounts outstanding under the commercial paper program.

Because some underwriters or their affiliates hold the commercial paper or Notes JJ being repaid, they may receive a substantial share of the proceeds. The filing also states that the underwriters have provided other banking services to the Partnership and its affiliates. For investors, the deal is a refinancing and liquidity step rather than a change in strategy.

It pre-funds the February 2024 maturity, reduces reliance on short-term commercial paper, and extends the maturity profile. The exhibits show roughly $29.7 billionc of consolidated indebtedness as of September 30, 2023, on an as-adjusted basis, with the Partnership itself holding no direct debt apart from its guarantees. Coupons of 4.60% and 4.85% are in line with the company's existing long-dated notes, and the offering was priced at a small discount to par.

02—Key points

Key Highlights

  1. EPO priced $2.0 billion of senior unsecured notes: $1.0B of 4.60% notes due January 11, 2027 and $1.0B of 4.85% notes due January 31, 2034.
  2. Issue prices were 99.897% (2027 notes) and 99.705% (2034 notes), implying a modest underwriting discount.
  3. Notes are fully and unconditionally guaranteed by Enterprise Products Partners L.P. on an unsecured, unsubordinated basis.
  4. Proceeds will fund general corporate purposes, including growth capital, and refinance the $850M 3.90% Notes JJ due February 2024 and commercial paper borrowings.
  5. Pro forma consolidated debt is about $29.7 billion as of September 30, 2023, including $27.4B of senior notes and $2.3B of junior subordinated notes.
  6. Closing is expected January 11, 2024, under an S-3 shelf registration (Nos. 333-261416 and 333-261416-01).
  7. Some underwriters or their affiliates hold the Notes JJ and commercial paper being repaid, so they may receive a substantial portion of the proceeds.

03—Questions

Frequently Asked Questions

  1. How much debt is EPD issuing, and on what terms?

    EPO is issuing $2.0 billion in total: $1.0 billion of 4.60% senior notes maturing January 11, 2027 and $1.0 billion of 4.85% senior notes maturing January 31, 2034. Both are unsecured, senior obligations of EPO, guaranteed by the Partnership, with semi-annual interest payments.

  2. Why is the company issuing these notes?

    Proceeds are intended for general corporate purposes, including growth capital, and for repaying debt. Specifically, this includes all or part of the $850 million 3.90% Notes JJ maturing in February 2024, along with outstanding commercial paper.

  3. Does this change the company's overall debt load?

    Not materially. The offering largely refinances maturing and short-term debt. Pro forma consolidated indebtedness is about $29.7 billion as of September 30, 2023, on an as-adjusted basis, so the deal mainly shifts the maturity profile and funding mix.

  4. Is the Partnership itself a borrower?

    No. Per the filing, the Partnership had no indebtedness of its own as of September 30, 2023, and provides an unconditional, unsubordinated guarantee of EPO's notes. Its exposure is through that guarantee, which is why the parent guarantee is central to the credit structure.

  5. When does the offering close, and are there any notable risks or conflicts?

    Closing is scheduled for January 11, 2024. The filing notes that certain underwriters or their affiliates may receive a substantial portion of the proceeds because they hold the commercial paper or Notes JJ being repaid, and they have other banking relationships with the company.

04—Continue

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