|
Item 5.03
|
Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year.
|
On June 15, 2021, Energy Transfer LP (the “Partnership”) issued 900,000 of its 6.500% Series H Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Units representing limited partner interests in the Partnership (the “Series H Preferred Units”), at a price to the public of $1,000.00 per unit, pursuant to the previously filed Underwriting Agreement, dated as of June 1, 2021, by and among the Partnership and J.P. Morgan Securities LLC, Mizuho Securities USA LLC, PNC Capital Markets LLC and Truist Securities, Inc., as joint book-running managers and representatives of the several underwriters named therein (collectively, the “Underwriters”).
On June 15, 2021, in connection with the issuance of the Series H Preferred Units, LE GP, LLC (the “General Partner”) adopted Amendment No. 9 (the “LPA Amendment”) to the Third Amended and Restated Agreement of Limited Partnership of Energy Transfer LP (the “Partnership Agreement”) to establish the rights and obligations of the Series H Preferred Units. The Series H Preferred Units entitle their holders to certain rights that are senior to the rights of holders of common units representing limited partner interests in the Partnership (the “Common Units”), such as rights to certain distributions and rights upon liquidation of the Partnership.
The Series H Preferred Units rank senior to the Common Units, the Class A units representing limited partner interests in the Partnership, the Class B units representing limited partner interests in the Partnership, the General Partner Interest (as defined in the Partnership Agreement), and to any other class or series of the Partnership’s equity interests that may be established after the original issue date of the Series H Preferred Units (the “Original Issue Date”) and that are not expressly made senior to or on parity with the Series H Preferred Units as to the payment of distributions and amounts payable upon a liquidation event. The Series H Preferred Units rank junior to any other class or series of the Partnership’s equity interests that may be established after the Original Issue Date and that are expressly made senior to the Series H Preferred Units as to the payment of distributions and amounts payable upon a liquidation event. The Series H Preferred Units rank on parity with the Partnership’s 6.250% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units, 6.625% Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units, 7.375% Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units, 7.625% Series D Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units, 7.600% Series E Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units, 6.750% Series F Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Units and 7.125% Series G Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Units. The Series H Preferred Units have no stated maturity and are not subject to mandatory redemption or any sinking fund and will remain outstanding indefinitely unless repurchased or redeemed by the Partnership, as described below.
Distributions on the Series H Preferred Units are cumulative from and including the Original Issue Date and will be payable semi-annually in arrears on the 15th day of May and November of each year, commencing on November 15, 2021, in each case, when, as, and if declared by the General Partner. A pro-rated initial distribution on the Series H Preferred Units will be payable on November 15, 2021 in an amount equal to approximately $27.08 per Series H Preferred Unit. Distributions on the Series H Preferred Units will be payable out of amounts legally available therefor from and including the Original Issue Date to, but excluding, November 15, 2026 (the “First Reset Date”), at a rate equal to 6.500% per annum of the $1,000.00 liquidation preference. On and after the First Reset Date, the distribution rate on the Series H Preferred Units for each Reset Period (as defined below) will equal a percentage of the $1,000.00 liquidation preference equal to the Five-year U.S. Treasury Rate (as determined in accordance with the terms of the LPA Amendment) as of two business days prior to the beginning of the applicable Reset Period plus a spread of 5.694% per annum. “Reset Period” means the period from and including the First Reset Date to, but excluding, the next following Reset Date and thereafter each period from and including each Reset Date to, but excluding, the next following Reset Date. “Reset Date” means the First Reset Date and each date falling on the fifth anniversary of the preceding Reset Date.