01—Abstract
Summary
Summary of the 8-K filed August 20, 2024. Cited figures are marked; the original filing is the authoritative source.
On August 20, 2024, Western Midstream Operating, LP (WES Operating), a subsidiary of Western Midstream Partners, LP (NYSE: WES), completed a public offering of $800,000,000a aggregate principal amount of 5.450% Senior Notes due 2034.
The Notes mature on November 15, 2034, unless redeemed earlier, and pay interest semi-annually on May 15 and November 15, with the first interest payment due May 15, 2025. The offering was priced at 99.743%b of face value under an Underwriting Agreement dated August 15, 2024, with TD Securities (USA) LLC, BofA Securities, Inc., MUFG Securities Americas Inc. and PNC Capital Markets LLC as representatives of the underwriters. The Notes are governed by a Base Indenture dated May 18, 2011, as supplemented by a Fourteenth Supplemental Indenture dated August 20, 2024, with Computershare Trust Company, National Association as trustee.
The Notes rank equally in right of payment with WES Operating's existing and future senior indebtedness and senior to any subordinated debt. The Indenture limits liens on principal properties, sale and leaseback transactions, and mergers or sales of substantially all assets. The Notes are initially not guaranteed by subsidiaries, but would become fully and unconditionally guaranteed by any subsidiary that becomes a borrower or guarantor under WES Operating's revolving credit facility.
WES Operating stated it will use the net proceeds to repay a portion of its maturing 3.100%c Senior Notes due 2025 and 3.950% Senior Notes due 2025, and for general partnership purposes, including funding capital expenditures. The offering was made under a Form S-3 shelf registration statement that became effective March 30, 2023. The filing also notes that certain underwriters and their affiliates have engaged, and may continue to engage, in commercial and investment banking transactions with WES Operating in the ordinary course of business.
02—Key points
Key Highlights
- $800 million of 5.450% Senior Notes due November 15, 2034 were issued by WES Operating on August 20, 2024.
- Notes were sold at 99.743% of face value under an Underwriting Agreement dated August 15, 2024.
- Interest is payable semi-annually on May 15 and November 15, with the first payment due May 15, 2025.
- Proceeds will repay a portion of the 3.100% Senior Notes due 2025 and 3.950% Senior Notes due 2025, and fund general partnership purposes including capital expenditures.
- Notes rank equally with WES Operating's existing and future senior debt and are senior to any subordinated debt.
- Indenture covenants limit liens on principal properties, sale-leaseback transactions, and mergers or sales of substantially all assets.
- Notes are initially unguaranteed by subsidiaries, but future subsidiary guarantors may be required if they guarantee the revolving credit facility.
03—Questions
Frequently Asked Questions
What are the key terms of the new notes?
WES Operating issued $800 million of 5.450% Senior Notes due November 15, 2034, with semi-annual interest payments on May 15 and November 15, starting May 15, 2025. The notes may be redeemed in whole or in part before maturity at the redemption prices set in the Indenture.
How will the company use the proceeds?
The filing states that net proceeds will be used to repay a portion of the 3.100% Senior Notes due 2025 and 3.950% Senior Notes due 2025, and for general partnership purposes, including funding capital expenditures.
What protections do noteholders have?
The Indenture limits WES Operating and certain subsidiaries from creating liens on principal properties, engaging in sale-leaseback transactions, and merging or selling substantially all assets. Events of default include non-payment of interest for 30 days, non-payment of principal, failure to comply with other covenants for 60 days after notice, and certain bankruptcy events. Holders of at least 25% of the principal may accelerate the notes.
Are the notes guaranteed by WES Operating's subsidiaries?
Initially, no. The filing states that the notes are not guaranteed by any subsidiaries. However, if a subsidiary becomes a borrower or guarantor under WES Operating's revolving credit facility, or grants a lien to secure such obligations, that subsidiary will fully and unconditionally guarantee the notes for as long as it guarantees the revolving credit facility.
How were the notes priced and sold?
The notes were offered to the public at 99.743% of face value under an Underwriting Agreement dated August 15, 2024, with TD Securities (USA) LLC, BofA Securities, Inc., MUFG Securities Americas Inc. and PNC Capital Markets LLC as representatives of the underwriters. The offering was made under a shelf registration statement on Form S-3 that became effective March 30, 2023.
04—Continue