Summary
Targa Resources Corp. (TRGP) filed an 8-K on April 6, 2022, to report the completion of a significant public offering of $1.5 billion in aggregate principal amount of senior notes. This offering consists of $750 million of 4.200% Senior Notes due 2033 and $750 million of 4.950% Senior Notes due 2052. These new notes are fully and unconditionally guaranteed on a senior unsecured basis by certain of the company's subsidiaries, subject to specific conditions. The company also announced the results of a tender offer for its 5 7/8% Senior Notes due 2026, where approximately 50.06% of the outstanding principal amount was tendered, with the company expecting to accept all validly tendered notes and redeem any remaining notes.
Key Highlights
- 1Completion of a $1.5 billion underwritten public offering of senior notes ($750M 4.200% due 2033 and $750M 4.950% due 2052).
- 2New notes are guaranteed by Targa Resources' subsidiaries.
- 3The offering was registered under a shelf registration statement.
- 4Tender Offer for 5 7/8% Senior Notes due 2026 saw $482.16 million (50.06%) of the principal amount tendered.
- 5Targa expects to accept all validly tendered 2026 Notes and redeem the remaining notes.
- 6The company utilized legal opinions from Vinson & Elkins L.L.P. and Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C. for the securities.
Frequently Asked Questions
This 8-K filing was primarily to report the completion of Targa Resources' $1.5 billion public offering of senior notes and to provide an update on the results of its tender offer for its 2026 Senior Notes.
The offering increases the company's total debt by $1.5 billion. The proceeds are expected to be used in conjunction with the tender offer and redemption of existing debt, potentially leading to a refinancing of its debt structure with longer maturities and potentially different interest rates.
The subsidiary guarantees provide additional credit support for the new senior notes, meaning that these guarantees can be tapped if Targa Resources Corp. itself were unable to meet its obligations. This generally strengthens the security for the noteholders.
Targa Resources Partners LP exercised its right to optionally redeem any 2026 Notes that were not validly tendered and purchased in the Tender Offer. This means all outstanding 2026 Notes will be redeemed.