What is the purpose of this $1 billion private placement for MPLX LP?

MPLX LP intends to use the approximately $984 million in net proceeds for capital expenditures, to repay debt, and for general partnership purposes. This infusion of capital provides financial flexibility for growth and operational needs.

What are the key features of the Series A Convertible Preferred Units?

The Series A Preferred Units are convertible into common units of MPLX LP. They carry cumulative quarterly distributions of $0.528125 per unit, with a step-up to the greater of this amount or the converted common unit distribution after two years. These units rank senior to common units in terms of distributions and liquidation.

When can the Series A Preferred Units be converted into common units?

Holders of the Preferred Units can elect to convert them into common units on a one-for-one basis after the third anniversary of the closing, provided certain conditions are met, such as a minimum conversion value. The Partnership may also elect to convert the units under specific market price and trading volume conditions after the fourth anniversary, or in connection with certain change of control events.

Are there any existing relationships between MPLX and the purchasers of the preferred units?

Yes, an affiliate of The Energy & Minerals Group (EMG), one of the purchasers, has existing joint venture interests with MPLX and owns all of MPLX's outstanding Class B units. Other purchasers or their affiliates are also believed to own common units.

MPLX 8-K: Material Agreements & Securities & Listing

Summary

MPLX LP announced on April 28, 2016, a significant private placement transaction to issue approximately 30.8 million Series A Convertible Preferred Units at $32.50 per unit, raising approximately $1 billion in gross proceeds. These proceeds are earmarked for capital expenditures, debt repayment, and general partnership purposes, providing MPLX with substantial financial flexibility. The transaction involved sophisticated investment vehicles managed by Stonepeak Infrastructure Partners, Magnetar Capital, Kayne Anderson Capital Advisors, and The Energy & Minerals Group (EMG).

Key Highlights

1MPLX LP to raise approximately $1 billion in gross proceeds through a private placement of Series A Convertible Preferred Units.
2The Series A Preferred Units will be issued at a price of $32.50 per unit.
3Net proceeds are expected to be around $984 million after deducting expenses, including a 1.5% transaction fee.
4Proceeds are intended for capital expenditures, debt repayment, and general partnership purposes.
5The Preferred Units rank senior to common units regarding distributions and liquidation rights.
6Holders of Preferred Units have conversion rights into common units under specific conditions, beginning after the third anniversary of the closing.
7The transaction is structured as a private placement, relying on the exemption under Section 4(a)(2) of the Securities Act of 1933.

MPLX LP 8-K Report, Material Agreement (Apr 29, 2016)

Summary

Key Highlights

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