Summary
Energy Transfer LP (ET) announced on June 15, 2021, the issuance of 900,000 Series H Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Units. These preferred units were issued at $1,000.00 each, raising significant capital for the partnership. The Series H Preferred Units hold a senior position to common units and other equity interests, with specific rights to distributions and liquidation. The issuance of these preferred units was accompanied by an amendment to the partnership's agreement to establish their specific rights and obligations. The Series H Preferred Units have a fixed distribution rate of 6.500% annually until November 15, 2026, after which the rate will reset every five years based on the Five-year U.S. Treasury Rate plus a spread of 5.694%. These units do not have a stated maturity date and can be redeemed by the partnership under certain conditions. This move diversifies ET's capital structure and provides a new class of investor exposure.
Key Highlights
- 1Issuance of 900,000 Series H Preferred Units at $1,000.00 per unit.
- 2Series H Preferred Units rank senior to common units and most other equity interests.
- 3Fixed distribution rate of 6.500% per annum until November 15, 2026.
- 4Post-2026 distribution rate will be variable, tied to the Five-year U.S. Treasury Rate plus a 5.694% spread.
- 5The Series H Preferred Units have no stated maturity date and are redeemable by the Partnership.
- 6Amendment to the Partnership Agreement established the rights and obligations of the Series H Preferred Units.
- 7Limited voting rights for holders of Series H Preferred Units, primarily related to adverse changes to their terms or the issuance of senior securities.