8-KMaterial AgreementsFinancial EventsExhibits & Filings

ONEOK INC /NEW/ 8-K Report, Material Agreement (Jun 29, 2005)

Filed June 29, 2005For Securities:OKE

Summary

ONEOK, Inc. (OKE) has filed an 8-K report detailing a significant financial transaction related to its previously announced acquisition of natural gas liquids businesses from Koch Industries, Inc. The company has entered into a $1 billion, 364-day bridge credit facility to help finance a portion of this acquisition, which is valued at approximately $1.35 billion. This facility, co-managed by Citigroup Global Markets Inc. and UBS Securities LLC, is set to mature on June 26, 2006. The agreement includes standard covenants, notably a debt-to-capitalization ratio limit that must not exceed 70.0% before March 31, 2006, and 67.5% thereafter. The filing indicates that proceeds will be used for the short-term financing of the Koch acquisition, with potential prepayments required if the company engages in significant asset sales or debt/equity issuances. Investors should note the short-term nature of this financing and the financial covenants tied to the company's leverage.

Key Highlights

  • 1ONEOK entered into a $1 billion, 364-day bridge credit facility on June 28, 2005.
  • 2The facility is intended to finance a portion of the $1.35 billion acquisition of Koch Industries' natural gas liquids businesses.
  • 3The credit facility matures on June 26, 2006, with all outstanding amounts due at that time.
  • 4The agreement includes covenants such as a consolidated total debt to total capital ratio not exceeding 70.0% (pre-March 31, 2006) and 67.5% (post-March 31, 2006).
  • 5Equity units are treated as 75% equity and 25% debt for covenant calculation purposes until common stock issuance.
  • 6The facility has specific prepayment requirements tied to asset sales or debt/equity issuances above certain thresholds.
  • 7The credit facility agreement was filed as an exhibit, along with a press release dated June 28, 2005.

Frequently Asked Questions

The primary purpose of the $1 billion, 364-day bridge credit facility is to provide short-term financing for a portion of ONEOK's previously announced acquisition of the natural gas liquids businesses from Koch Industries, Inc. and its affiliates, valued at approximately $1.35 billion.

The bridge credit facility matures on June 26, 2006, at which point all outstanding amounts, including interest, will be due and payable.

The credit facility agreement includes covenants that limit ONEOK's financial leverage. Specifically, the ratio of consolidated total debt to total capital cannot exceed 70.0% prior to March 31, 2006, and must not exceed 67.5% thereafter. Additionally, equity units are treated as 75% equity and 25% debt for this calculation until common stock is issued.

Yes, the agreement stipulates that certain prepayments of the facility may be required with the net cash proceeds from transactions such as asset sales or the issuance of debt or equity, if these exceed specified thresholds.