Summary
Targa Resources Corp. (TRGP) filed an 8-K on March 17, 2016, detailing a significant private placement of Series A Preferred Stock and warrants, raising approximately $969 million in net proceeds. This capital infusion is designated for repaying indebtedness and general corporate purposes, addressing immediate financial needs. The filing outlines the terms of the Series A Preferred Stock, including a 9.5% annual distribution rate and conversion rights into common stock after twelve years. Additionally, it details the associated warrants, board representation rights granted to Stonepeak Infrastructure Partners, and registration rights for the resale of common stock. These arrangements indicate a strategic financial maneuver to strengthen the balance sheet and provide flexibility for future operations.
Key Highlights
- 1Targa Resources Corp. closed a private placement on March 16, 2016, raising approximately $969 million in net proceeds through the sale of Series A Preferred Stock and warrants.
- 2Proceeds from the private placement will be used primarily to repay indebtedness and for general corporate purposes.
- 3The Series A Preferred Stock carries a 9.5% annual distribution rate and has conversion rights into common stock after twelve years, subject to certain conditions.
- 4Stonepeak Infrastructure Partners (and its affiliates) are significant purchasers, receiving board observer rights and the potential for a board seat under certain trigger events.
- 5Warrants were issued in conjunction with the preferred stock, exercisable into Targa Resources' common stock with specific exercise prices.
- 6The company filed a Certificate of Designations to establish the rights and preferences of the new Series A Preferred Stock, which ranks senior to common stock.
- 7Registration rights agreements were entered into to facilitate the resale of common stock issuable upon conversion of preferred stock and exercise of warrants.