Summary
Targa Resources Corp. (TRGP), through its subsidiary Targa Resources Partners LP, has amended its accounts receivable securitization facility. The Tenth Amendment to the Receivables Purchase Agreement, entered into on April 21, 2021, increases the facility size from $350 million to $400 million and extends its termination date to April 21, 2022. This move enhances the company's liquidity and financial flexibility by expanding its access to capital through the securitization of its trade receivables.
Key Highlights
- 1Targa Resources Partners LP, a subsidiary of TRGP, amended its receivables purchase agreement.
- 2The accounts receivable securitization facility size was increased from $350 million to $400 million.
- 3The facility's termination date was extended by one year, from its original expiration to April 21, 2022.
- 4The amendment includes customary language for replacing LIBOR, indicating preparation for potential future regulatory changes.
- 5As of the amendment date, $270 million of trade receivables were outstanding under the facility.
- 6This action demonstrates Targa's commitment to maintaining robust liquidity and financial management.
Frequently Asked Questions
The primary purpose of the Tenth Amendment is to increase the company's available liquidity by expanding its accounts receivable securitization facility from $350 million to $400 million and extending its termination date to April 21, 2022. This provides Targa with greater financial flexibility and capital access.
The amendment strengthens Targa's financial position by increasing its borrowing capacity through its receivables securitization program and extending the availability of these funds. It signals a proactive approach to liquidity management.
The inclusion of customary LIBOR replacement language suggests that Targa Resources is preparing for the eventual phasing out of the London Interbank Offered Rate (LIBOR) by incorporating alternative benchmark rate provisions into its credit facilities. This is a standard practice in financial markets to ensure continued operational integrity as regulatory environments evolve.