8-KMaterial AgreementsOther EventsExhibits & Filings

Targa Resources Corp. 8-K Report, Material Agreement (Jan 22, 2021)

Filed January 22, 2021For Securities:TRGP

Summary

Targa Resources Corp. (TRGP), through its subsidiary Targa Resources Partners LP, announced on January 19, 2021, the pricing of a $1 billion offering of 4% senior unsecured notes due 2032. The offering is expected to generate net proceeds of approximately $992.3 million. These proceeds are earmarked for a significant refinancing effort, primarily to fund a cash tender offer for its outstanding 5 1/8% Senior Notes due 2025, including associated fees, premiums, and redemption of any remaining notes. The remaining funds from the note offering will be used to reduce borrowings under Targa's and its subsidiary's senior secured revolving credit facilities. This strategic move demonstrates Targa's commitment to optimizing its capital structure, extending its debt maturity profile, and enhancing its liquidity. The transaction involved BofA Securities, Inc. as the representative for the initial purchasers, who may also have existing relationships with Targa as lenders or noteholders.

Key Highlights

  • 1Targa Resources Partners LP priced a $1 billion offering of 4% senior unsecured notes due 2032.
  • 2Net proceeds are estimated to be approximately $992.3 million.
  • 3A primary use of proceeds is a cash tender offer for the 5 1/8% Senior Notes due 2025.
  • 4Remaining proceeds will be used to reduce borrowings under Targa's and its subsidiary's revolving credit facilities.
  • 5This offering aims to refinance existing debt and manage the company's maturity profile.
  • 6BofA Securities, Inc. acted as the representative for the initial purchasers.
  • 7Some initial purchasers or their affiliates have existing financial relationships with Targa.

Frequently Asked Questions

The main purpose is to refinance existing debt, specifically to fund a cash tender offer for Targa's 5 1/8% Senior Notes due 2025 and to pay associated fees, premiums, and redemption costs for any remaining 2025 notes. Additionally, a portion of the proceeds will be used to reduce borrowings under Targa's and its subsidiary's revolving credit facilities.

Targa Resources Partners LP is issuing $1 billion in aggregate principal amount of 4% senior unsecured notes due 2032. The notes were priced at par.

Approximately $992.3 million in net proceeds will be used to fund the cash tender offer for the 2025 notes and related expenses. The remaining proceeds will be applied to reduce outstanding balances on Targa's and its subsidiary's senior secured revolving credit facilities.

The filing notes that initial purchasers or their affiliates have performed various financial services for Targa in the past and may continue to do so. Some of these entities are also lenders under Targa's credit facilities or may hold the notes being tendered, meaning they could receive a portion of the proceeds from this offering. These are considered customary relationships in such transactions.