01—Abstract
Summary
Summary of the 8-K filed June 27, 2024. Cited figures are marked; the original filing is the authoritative source.
Plains All American Pipeline, L.P.
("PAA") and its co-issuer PAA Finance Corp. completed a public offering on June 27, 2024 of $650 milliona aggregate principal amount of 5.700% Senior Notes due 2034. The Notes mature on September 15, 2034, with interest payable semi-annually on March 15 and September 15, beginning March 15, 2025. The Issuers may redeem some or all of the Notes before maturity at the redemption prices specified in the Indenture.
The Notes are PAA's senior unsecured obligations, ranking equally with all existing and future senior debt and senior to future subordinated debt, and are effectively subordinated to secured debt to the extent of the value of the collateral. The Indenture, dated as of September 25, 2002 and supplemented by the Thirty-Third Supplemental Indenture dated June 27, 2024, restricts PAA and certain subsidiaries from entering into sale and leaseback transactions, incurring liens, merging or consolidating, and transferring or selling assets, subject to exceptions. Customary events of default apply, including a cross-default on other indebtedness of $150.0 millionb or more, and the Trustee or holders of at least 25% of the outstanding Notes may accelerate the Notes upon an uncured event of default.
The filing also incorporates the terms into a direct financial obligation disclosure and lists exhibits including the Supplemental Indenture, the form of Notes, and a legal opinion from Vinson & Elkins L.L.P. Other material terms are described in a prospectus supplement dated June 17, 2024.
02—Key points
Key Highlights
- Completed a public offering of $650 million aggregate principal amount of 5.700% Senior Notes due 2034 on June 27, 2024.
- Notes mature September 15, 2034; interest is payable March 15 and September 15, starting March 15, 2025.
- Notes are senior unsecured obligations of PAA, ranking equally with existing and future senior debt and effectively subordinated to secured debt.
- Indenture restricts sale and leaseback transactions, liens, mergers or consolidations, and asset transfers and sales, subject to exceptions.
- Cross-default provision triggers on payment defaults or accelerations of other indebtedness totaling $150.0 million or more.
- Trustee or holders of at least 25% of outstanding Notes may accelerate the principal upon an event of default.
- Filing covers Item 1.01 (Material Definitive Agreement) and Item 2.03 (Direct Financial Obligation), with the Supplemental Indenture filed as Exhibit 4.1.
03—Questions
Frequently Asked Questions
What did Plains All American Pipeline issue in this offering?
PAA and PAA Finance Corp. issued $650 million aggregate principal amount of 5.700% Senior Notes due 2034 in a public offering completed on June 27, 2024.
When do the Notes mature and when is interest paid?
The Notes mature on September 15, 2034. Interest is payable each March 15 and September 15, beginning March 15, 2025.
How do the Notes rank relative to PAA's other debt?
The Notes are senior unsecured obligations that rank equally with all existing and future senior debt and senior to future subordinated debt. They are effectively subordinated to secured debt to the extent of the collateral value.
What restrictions does the Indenture place on PAA?
In certain circumstances, the Indenture limits PAA and certain subsidiaries from entering into sale and leaseback transactions, incurring liens, merging or consolidating with another company, and transferring or selling assets. These are subject to several exceptions and qualifications.
What events could make the Notes become immediately due?
Events of default include non-payment of interest for 60 days or principal when due, certain failures to comply with the Indenture, payment defaults or accelerations on other indebtedness of $150.0 million or more, and certain bankruptcy or insolvency events. The Trustee or holders of at least 25% of the outstanding Notes may then declare the principal and accrued interest due, and bankruptcy-related defaults cause automatic acceleration.
04—Continue