8-KMaterial AgreementsExhibits & Filings

Targa Resources Corp. 8-K Report, Material Agreement (Apr 22, 2022)

Filed April 22, 2022For Securities:TRGP

Summary

Targa Resources Corp. (TRGP) announced on April 22, 2022, through a Form 8-K filing, a significant amendment to its accounts receivable securitization facility. The Twelfth Amendment to the Receivables Purchase Agreement, entered into on April 19, 2022, extends the facility's termination date by one year to April 19, 2023, enhancing financial flexibility and providing continued access to funding. This extension is crucial for maintaining operational liquidity and supporting ongoing business activities. Furthermore, the amendment addresses the transition away from LIBOR by replacing LIBOR-based interest rate options with SOFR-based alternatives, aligning with industry-wide shifts in benchmark rates. As of the amendment date, approximately $320 million of trade receivables were outstanding under the $400 million facility, indicating its continued utilization. This move demonstrates proactive financial management by Targa Resources in adapting to evolving financial markets and ensuring the stability of its financing arrangements.

Key Highlights

  • 1Targa Resources Partners LP (subsidiary of TRGP) and Targa Receivables LLC (indirect wholly-owned subsidiary) entered into the Twelfth Amendment to their Receivables Purchase Agreement.
  • 2The amendment extends the maturity date of the $400 million accounts receivable securitization facility by one year, from the original termination date to April 19, 2023.
  • 3The facility is a crucial source of funding, with approximately $320 million in trade receivables outstanding as of April 19, 2022.
  • 4The amendment replaces LIBOR-based interest rate options with SOFR-based alternatives (term SOFR and daily simple SOFR), reflecting the industry's transition away from LIBOR.
  • 5This action ensures continued access to liquidity and demonstrates proactive financial risk management.
  • 6The amendment was filed on April 22, 2022, with the event date being April 19, 2022.

Frequently Asked Questions

The primary purpose of the amendment is to extend the termination date of Targa Resources' $400 million accounts receivable securitization facility by one year, to April 19, 2023. It also replaces LIBOR-based interest rates with SOFR-based alternatives.

As of April 19, 2022, approximately $320 million of trade receivables were outstanding under the $400 million facility, indicating significant utilization and reliance on this funding source.

The transition from LIBOR to SOFR is a regulatory and market-driven shift. By replacing LIBOR-based rates with SOFR-based options, Targa Resources is adapting to the evolving financial landscape, mitigating future rate transition risks, and ensuring the continued operability of its financing facility.

The amendment provides Targa Resources with continued access to a significant source of liquidity for at least another year, enhancing financial stability and flexibility. The adoption of SOFR demonstrates proactive management of interest rate risk and compliance with market standards.