Summary
Energy Transfer Equity, L.P. (ET) reported on May 22, 2015, the completion of a $1.0 billion public offering of its 5.500% Senior Notes due 2027. The net proceeds, approximately $985 million after expenses, are earmarked for repaying outstanding debt under its revolving credit facility and partially settling amounts under its $1.4 billion term loan facility. This offering is a significant event for investors as it directly addresses the company's debt structure. By reducing reliance on its credit facilities, ET aims to improve its financial flexibility and manage its debt profile. The new notes carry a fixed interest rate and mature in 2027, ranking as senior unsecured obligations of the Partnership.
Key Highlights
- 1Completion of a $1.0 billion offering of 5.500% Senior Notes due 2027.
- 2Net proceeds of approximately $985 million are intended for debt reduction.
- 3Proceeds will be used to repay outstanding amounts under the revolving credit facility and the $1.4 billion term loan facility.
- 4The Notes are senior unsecured obligations of Energy Transfer Equity, L.P.
- 5Interest on the Notes is payable semi-annually on June 1 and December 1, commencing December 1, 2015.
- 6The Notes mature on June 1, 2027.
- 7Standard covenants and events of default are detailed within the Indenture.
Frequently Asked Questions
The primary purpose is to refinance existing debt. Energy Transfer Equity, L.P. (ET) plans to use the net proceeds to repay all outstanding indebtedness under its revolving credit facility and to partially repay amounts outstanding under its $1.4 billion term loan facility.
The notes have a principal amount of $1.0 billion, bear a fixed interest rate of 5.500% per annum, and mature on June 1, 2027. Interest is payable semi-annually on June 1 and December 1, starting December 1, 2015. The notes are senior obligations of the Partnership.
By repaying amounts under its revolving credit facility and term loan, ET is expected to improve its liquidity and potentially reduce its overall interest expense, depending on the terms of the refinanced debt. It also extends the maturity profile of some of its debt.
The Notes are senior obligations of the Partnership and are secured on a first-priority basis by a lien on substantially all of the Partnership's and certain of its subsidiaries' tangible and intangible assets that secure its revolving credit facility, senior secured loan facilities, and existing senior notes. However, the Notes will initially not be guaranteed by any of the Partnership's subsidiaries.