8-K/AMaterial AgreementsSecurities & ListingShareholder Matters+2

Targa Resources Corp. 8-K/A Report, Material Agreement (Mar 17, 2016)

Filed March 17, 2016For Securities:TRGP

Summary

Targa Resources Corp. (TRGP) filed an 8-K/A on March 17, 2016, primarily to amend a previous filing and include several material exhibits related to a private placement of Series A Preferred Stock and accompanying warrants. This private placement, involving Stonepeak Target Holdings LP and other purchasers, closed on March 16, 2016, and generated approximately $969 million in net proceeds. The funds are earmarked for debt repayment and general corporate purposes. The Series A Preferred Stock carries a significant 9.5% annual distribution preference and includes provisions for conversion into common stock after 12 years, subject to certain conditions and price thresholds. It also has redemption rights for Targa Resources, with increasing premiums over time and special provisions for change-of-control events. The issuance of this preferred stock and warrants is a key event that will impact the company's capital structure and future obligations.

Key Highlights

  • 1Targa Resources Corp. closed a private placement of Series A Preferred Stock and warrants on March 16, 2016, raising approximately $969 million in net proceeds.
  • 2Proceeds from the private placement are designated for repaying indebtedness and general corporate purposes.
  • 3The Series A Preferred Stock has a liquidation preference and accrues quarterly distributions at an annual rate of 9.5%.
  • 4Holders of the Series A Preferred Stock have conversion rights into common stock after 12 years, subject to specific conversion prices and potential anti-dilution adjustments.
  • 5Targa Resources has redemption rights for the Series A Preferred Stock, with varying premiums based on the timing and circumstances of redemption, particularly during change-of-control events.
  • 6Stonepeak Target Holdings LP has board observer rights, with the potential to gain a board seat and additional voting rights under specific 'Dividend Trigger' or 'Default Trigger' events.
  • 7Registration rights have been granted for the common stock underlying the preferred stock and warrants, facilitating future resale.

Frequently Asked Questions

This 8-K/A filing amends a prior 8-K filing to include material exhibits related to a private placement of Series A Preferred Stock and warrants. It clarifies the details and terms of this significant transaction.

Targa Resources raised approximately $969 million in net proceeds from the private placement. These funds are intended to be used for repaying existing indebtedness and for general corporate purposes.

The Series A Preferred Stock ranks senior to common stock, carries a 9.5% annual distribution preference, has a liquidation preference, and can be converted into common stock after 12 years under certain conditions. It also includes redemption rights for the company and specific rights for the holders, such as board observer seats for Stonepeak under certain triggers.

Accompanying the preferred stock, Targa Resources also issued Series A and Series B warrants. These warrants are exercisable into Targa Resources' common stock at specified prices and have an expiration date. They represent potential future dilution for existing common stockholders.