01—Abstract
Summary
Summary of the 8-K filed September 24, 2024. Cited figures are marked; the original filing is the authoritative source.
ONEOK, Inc. has successfully completed a significant public offering of $6.25 billiona in aggregate principal amount of notes across various maturities, ranging from 2027 to 2064, with coupon rates from 4.250% to 5.850%.
The primary purpose of this substantial debt issuance is to fund the acquisition of Global Infrastructure Partners' (GIP) interests in EnLink Midstream, LLC and Medallion Midstream, LLC. The net proceeds, approximately $6.9 billionb, will directly facilitate these strategic transactions, with any remaining funds allocated for general corporate purposes, including potential debt repayment. This offering also led to the termination of a $6.0 billion unsecured term loan facility with JPMorgan Chase Bank, N.A. and Goldman Sachs Bank USA, as ONEOK determined it was no longer necessary for financing the acquisitions.
The notes are guaranteed by ONEOK Partners, L.P., ONEOK Partners Intermediate Limited Partnership, and Magellan Midstream Partners, L.P. Notably, the 2027, 2029, and 2031 notes are subject to a special mandatory redemption if the EnLink transaction does not close by a specified outside date or if the purchase agreement is terminated, providing a degree of protection to investors in these tranches.
02—Key points
Key Highlights
- ONEOK completed a $6.25 billion public offering of notes with maturities spanning from 2027 to 2064.
- Proceeds will primarily fund the acquisition of GIP's interests in EnLink Midstream and Medallion Midstream.
- The offering raised approximately $6.9 billion in net proceeds.
- A $6.0 billion unsecured term loan facility was terminated as it is no longer needed for transaction financing.
- The new notes are guaranteed by ONEOK Partners, L.P., ONEOK Partners Intermediate Limited Partnership, and Magellan Midstream Partners, L.P.
- Certain notes (2027, 2029, 2031) have a special mandatory redemption provision if the EnLink acquisition does not close by the specified outside date.
- The issuance reflects ONEOK's strategy to finance significant growth opportunities through capital markets.
03—Questions
Frequently Asked Questions
What is the main purpose of this $6.25 billion note offering?
The primary purpose of the note offering is to finance ONEOK's previously announced acquisitions of Global Infrastructure Partners' (GIP) interests in EnLink Midstream, LLC and Medallion Midstream, LLC. The net proceeds of approximately $6.9 billion are intended to cover the purchase price for these transactions, as well as related fees and expenses.
What is the significance of the terminated $6.0 billion term loan facility?
The termination of the $6.0 billion unsecured term loan facility indicates that ONEOK has secured sufficient funding through its note offering and determined that this credit facility is no longer necessary to finance the EnLink and Medallion transactions. This suggests a confident approach to funding the acquisitions via the capital markets.
Are there any specific protections for investors in the newly issued notes?
Yes, the 2027 Notes, 2029 Notes, and 2031 Notes are subject to a special mandatory redemption. This means that if the EnLink Transaction does not close by a specified outside date, or if the purchase agreement is terminated, ONEOK will be required to redeem these notes at 101% of their principal amount plus accrued interest. This provides a level of protection against the deal not closing.
Who are the guarantors for these new notes?
The new notes are guaranteed by ONEOK Partners, L.P., ONEOK Partners Intermediate Limited Partnership, and Magellan Midstream Partners, L.P.
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