Summary
This 8-K filing by Targa Resources Corp. (TRGP) on February 5, 2021, details a significant financing event: the issuance of $1 billion in 4% senior unsecured notes due 2032 by its subsidiary, Targa Resources Partners LP. This offering, conducted through a private placement exempt from registration requirements, was aimed at refinancing existing debt and strengthening the company's balance sheet. The proceeds are earmarked for a cash tender offer to repurchase outstanding 5 1/8% Senior Notes due 2025, covering associated fees and premiums, and to reduce borrowings under the company's revolving credit facilities. The Indenture governing these new notes imposes certain covenants on the Partnership and its subsidiaries, restricting their ability to incur additional debt, pay distributions, make investments, incur liens, engage in affiliate transactions, merge or consolidate, and transfer assets. However, these covenants may be terminated if the notes achieve investment grade ratings from specified agencies and no default exists. The filing also outlines events that would constitute a default under the Indenture, including payment defaults, failure to make required offers, breaches of covenants, and bankruptcy or insolvency events. A Registration Rights Agreement was also executed to facilitate the eventual registration or exchange of these notes for freely tradable securities.
Key Highlights
- 1Targa Resources Partners LP issued $1 billion of 4% senior unsecured notes due 2032.
- 2The offering was conducted as a private placement under Rule 144A and Regulation S, exempt from SEC registration requirements.
- 3Proceeds will be used to fund a tender offer for 5 1/8% Senior Notes due 2025, pay related expenses, and reduce borrowings under credit facilities.
- 4The new notes are guaranteed on a senior unsecured basis by certain Targa subsidiaries.
- 5The Indenture includes covenants that restrict the Partnership and its subsidiaries from incurring additional debt, paying distributions, making investments, incurring liens, and other actions.
- 6Covenants under the Indenture may be terminated if the notes receive an investment grade rating and no default is ongoing.
- 7The filing also references a press release concerning the expiration and results of a concurrent tender offer for existing notes.