Summary
MPLX LP (MPLX) filed an 8-K on August 4, 2016, to announce the Second Amended and Restated Distribution Agreement. This agreement significantly modifies the terms under which MPLX can issue and sell its common units. The primary purpose of this amendment is to incorporate M&R MWE Liberty, LLC (the "Selling Unitholder") as a party to the agreement, following MPLX's acquisition of MarkWest Energy Partners, L.P. The amendment also expands the potential for "at the market" offerings, allowing for the sale of a substantial number of common units by both the Selling Unitholder and MPLX itself through a syndicate of sales agents.
Key Highlights
- 1MPLX LP entered into a Second Amended and Restated Distribution Agreement on August 4, 2016.
- 2M&R MWE Liberty, LLC (the "Selling Unitholder") has been added as a party to the agreement.
- 3The agreement facilitates "at the market" offerings of MPLX common units.
- 4The Selling Unitholder may sell up to 16,714,547 common units.
- 5MPLX LP may issue and sell common units with an aggregate offering price of up to $1,181,240,389.
- 6Sales will occur through a group of named sales agents, including J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated.
- 7Commissions for sales agents are capped at 2% of the gross sales price, and MPLX will cover certain expenses.
Frequently Asked Questions
The main purpose is to formalize the involvement of the Selling Unitholder (M&R MWE Liberty, LLC) in distributing MPLX common units and to increase the potential amount of common units that can be offered and sold in "at the market" offerings. This is a consequence of MPLX's prior acquisition of MarkWest Energy Partners, L.P.
The Selling Unitholder can sell up to 16,714,547 common units. Additionally, MPLX LP can issue and sell its own common units with a total offering price of up to $1,181,240,389.
"At the market" offerings, as defined by Rule 415 of the Securities Act of 1933, are sales conducted through ordinary brokers' transactions on stock exchanges, trading facilities, or similar market venues at prevailing market prices. These sales can also be made in block transactions or as otherwise agreed with the sales agents.
The sales agents will receive a commission at a fixed rate of up to 2% of the gross sales price per common unit. MPLX LP has also agreed to pay certain expenses incurred by the sales agents and the Selling Unitholder in connection with these offerings.