01—Abstract
Summary
Summary of the 8-K filed February 27, 2025. Cited figures are marked; the original filing is the authoritative source.
Targa Resources Corp. (TRGP) has announced the successful completion of a significant underwritten public offering, raising a total of $2.0 billiona through the issuance of new senior notes.
This includes $1.0 billionb in 5.550% Senior Notes due 2035 and $1.0 billion in 6.125% Senior Notes due 2055. These notes are guaranteed by certain of the Company's subsidiaries, providing additional security to investors. The primary strategic use of the proceeds is to fund the repurchase of the outstanding preferred equity in Targa Badlands LLC, which holds the Company's North Dakota assets, for approximately $1.8 billion.
This transaction is expected to close in the first quarter of 2025 and, if completed, will consolidate full ownership of these valuable assets under Targa Resources. Any remaining proceeds will be used for general corporate purposes, including repaying commercial paper borrowings and other indebtedness.
02—Key points
Key Highlights
- Completed a $2.0 billion public offering of senior notes, consisting of $1.0 billion of 5.550% Senior Notes due 2035 and $1.0 billion of 6.125% Senior Notes due 2055.
- Proceeds will be used to repurchase approximately $1.8 billion of preferred equity in Targa Badlands LLC, consolidating ownership of North Dakota assets.
- The Targa Badlands LLC acquisition is expected to close in Q1 2025.
- The new notes are fully and unconditionally guaranteed by certain of Targa Resources' subsidiary guarantors.
- Remaining net proceeds will be used for general corporate purposes, including repaying borrowings under its commercial paper program and other indebtedness.
- The offering was registered under a shelf registration statement on Form S-3ASR.
- The transaction indicates a strategic move to increase control over its North Dakota asset base.
03—Questions
Frequently Asked Questions
What is the primary use of the $2.0 billion raised from the senior note offering?
The primary use of the proceeds is to fund the repurchase of approximately $1.8 billion of preferred equity in Targa Badlands LLC, which holds Targa Resources' North Dakota assets. This will allow Targa Resources to gain full ownership of these assets.
What are the terms of the new senior notes issued?
Targa Resources issued two tranches of senior notes: $1.0 billion aggregate principal amount of 5.550% Senior Notes due 2035 and $1.0 billion aggregate principal amount of 6.125% Senior Notes due 2055. These notes are guaranteed by certain subsidiary guarantors.
What happens if the Targa Badlands LLC acquisition does not close?
If the Targa Badlands LLC transaction is not completed, Targa Resources expects to use the net proceeds from the offering for general corporate purposes. This includes repaying borrowings under its commercial paper program, repaying other indebtedness, capital expenditures, additions to working capital, and investments in its subsidiaries.
When is the Targa Badlands LLC transaction expected to close?
The Targa Badlands LLC transaction is expected to close in the first quarter of 2025, subject to customary closing conditions. The effective date of the transaction is January 1, 2025.
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