What is the primary purpose of this $5.2 billion note issuance?

The primary purpose of the $5.2 billion note issuance is to fund the cash consideration and other related expenses for ONEOK's previously announced merger with Magellan Midstream Partners, L.P.

What happens to the notes if the merger with Magellan Midstream Partners does not go through?

If the merger is not consummated by a specified outside date, the merger agreement is terminated, or ONEOK decides not to proceed with the merger, the notes will be subject to a special mandatory redemption. This means ONEOK will be required to redeem all outstanding notes at 101% of their principal amount, plus any accrued and unpaid interest.

What does the termination of the bridge loan facility signify?

The termination of the $5.25 billion bridge loan facility signifies that ONEOK has secured the necessary funding for the merger through the issuance of these notes, thereby eliminating the need for the short-term bridge financing.

OKE 8-K: Material Agreements & Financial Events

Q: Who guarantees these newly issued notes?

The notes are guaranteed by ONEOK Partners, L.P. and ONEOK Partners Intermediate Limited Partnership.

Summary

ONEOK, Inc. (OKE) has filed an 8-K detailing the successful completion of a significant public offering of notes totaling approximately $5.2 billion. This offering comprises notes with varying maturities and interest rates, including 5.550% notes due 2026, 5.650% notes due 2028, 5.800% notes due 2030, 6.050% notes due 2033, and 6.625% notes due 2053. These notes are guaranteed by ONEOK Partners, L.P. and ONEOK Partners Intermediate Limited Partnership. The primary purpose of this debt issuance is to fund the cash portion of ONEOK's previously announced merger with Magellan Midstream Partners, L.P. The proceeds are intended to cover the cash consideration and other related costs for this substantial acquisition. In connection with this offering, ONEOK has also terminated its previously arranged $5.25 billion bridge loan facility, indicating a successful transition from interim financing to long-term debt for the merger. A notable feature of these notes is a special mandatory redemption provision. Should the merger with Magellan Midstream Partners not be consummated by a specified outside date (or if the merger agreement is terminated, or ONEOK decides not to proceed), the notes will be subject to mandatory redemption at 101% of their principal amount plus accrued interest. This provision offers a degree of protection to noteholders in the event the merger does not close.

Key Highlights

1ONEOK successfully closed a public offering of approximately $5.2 billion in aggregate principal amount of notes across five different series with maturities ranging from 2026 to 2053.
2The proceeds from the note issuance are earmarked to finance the cash consideration for the proposed merger with Magellan Midstream Partners, L.P.
3The offering included notes with coupon rates ranging from 5.550% to 6.625%.
4ONEOK has terminated its $5.25 billion bridge loan commitments, as the proceeds from the new notes are being used to fund the merger.
5The newly issued notes are guaranteed by ONEOK Partners, L.P. and ONEOK Partners Intermediate Limited Partnership.
6A special mandatory redemption clause is in place: if the Magellan merger does not close by the outside date, or is terminated, the notes will be redeemed at 101% of the principal amount plus accrued interest.

ONEOK INC /NEW/ 8-K Report, Material Agreement (Aug 25, 2023)

Summary

Key Highlights

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