Summary
ONEOK, Inc. (OKE) announced on April 18, 2017, the execution of a new $2.5 billion revolving unsecured credit facility (the "ONEOK Credit Agreement"), which is designed to provide significant liquidity for various corporate purposes, including working capital, capital expenditures, and potential acquisitions. This facility is subject to the completion of the merger between ONEOK Partners, L.P. and a ONEOK subsidiary, with an effective date deadline of October 16, 2017. The credit facility includes options for up to an additional $1.0 billion in commitments and matures in five years, with potential one-year extensions.
Key Highlights
- 1ONEOK entered into a new $2.5 billion unsecured revolving credit facility.
- 2The facility can be increased by an additional $1.0 billion, subject to certain conditions.
- 3The credit facility is intended to fund working capital, capital expenditures, acquisitions, and other general corporate purposes.
- 4The effectiveness of the credit facility is contingent upon the completion of the ONEOK Partners merger by October 16, 2017.
- 5The new credit facility matures in five years and can be extended.
- 6ONEOK Partners and its subsidiary will guarantee the obligations under the new credit facility.
- 7ONEOK Partners also amended its existing $1.0 billion unsecured term loan agreement, which will also be guaranteed by ONEOK upon completion of the merger.
Frequently Asked Questions
The primary purpose of the new $2.5 billion revolving unsecured credit facility is to provide ONEOK with enhanced liquidity for working capital needs, capital expenditures, potential acquisitions, and other general corporate purposes.
The ONEOK Credit Agreement will become effective upon the completion of the merger between ONEOK Partners, L.P. and a wholly owned subsidiary of ONEOK, and the satisfaction of other customary conditions outlined in the agreement. The agreement will terminate if the merger and other conditions are not met by October 16, 2017.
Yes, ONEOK's obligations under the new credit facility will be guaranteed by ONEOK Partners, L.P. and ONEOK Partners Intermediate Limited Partnership. These guarantees will be senior unsecured obligations.
The completion of the merger is a condition precedent for both the new ONEOK Credit Agreement and the amended ONEOK Partners Term Loan Agreement to become effective. The merger also results in ONEOK providing a guarantee for the amended term loan.