NGL Closes Refinancing of Revolving Credit Facility which Extends Maturities to 2026 & Increases Liquidity; Provides Distribu...
February 04 2021 - 4:18PM
Business Wire
NGL Energy Partners LP (NYSE: NGL) (“the “Partnership” or “NGL”)
closed on $2.05 billion of newly issued 7.5% senior secured notes
due 2026 (the ”2026 Secured Notes”) and a new $500 million
asset-based revolving credit facility (the “ABL Facility”) which
also matures in 2026. The proceeds from the 2026 Secured Notes and
borrowings under the ABL Facility will be used to repay all
outstanding amounts under the Partnership’s existing $1.915 billion
revolving credit facility and repay its $250 million term credit
facility, along with all fees and expenses associated with any of
these repayments and the issuance of the 2026 Secured Notes and the
ABL Facility. The Partnership currently has approximately $340
million in availability under the ABL Facility, net of all
currently outstanding borrowings and letters of credit.
In connection with the refinancing, the Partnership agreed to
certain restricted payment provisions under the 2026 Notes and the
ABL Facility. One of these provisions requires NGL to temporarily
suspend the quarterly common unit distribution beginning with
respect to the quarter ended December 31, 2020, as well as
distributions on all of the Partnership’s preferred units, until
the total leverage ratio falls below 4.75x. The cash savings from
this suspension should accelerate the deleveraging of the
Partnership’s balance sheet and increase NGL’s liquidity, thereby
creating more financial flexibility for the Partnership going
forward.
“This refinancing of our credit facility meaningfully extends
our debt maturities and provides a significant improvement in our
liquidity,” stated Mike Krimbill, NGL’s CEO. “This structure also
gives the Partnership additional flexibility once our leverage has
been reduced and eliminates certain financial covenants. Our Board
of Directors expects to evaluate a reinstatement of the common and
preferred distributions in due course, taking into account a number
of important factors, including our debt leverage, our liquidity,
the sustainability of our cash flows, upcoming debt maturities,
capital expenditures and the overall performance of our
businesses.”
JP Morgan Chase Bank, N.A. is an Issuing Lender, Joint Lead
Arranger, Joint Bookrunner and the Collateral and Administrative
Agent for the ABL Facility. Royal Bank of Canada and Barclays Bank
PLC are also Joint Lead Arrangers, Joint Bookrunners and Lenders
for the ABL Facility. The Toronto-Dominion Bank, New York Branch,
and Wells Fargo Bank, National Association are Issuing Lenders
under the ABL Facility. Paul Hastings LLP was legal advisor to the
Partnership and Simpson Thacher & Bartlett LLP was counsel to
the bank group. Intrepid Partners, LLC served as an advisor to the
Partnership.
The offer and sale of the 2026 Secured Notes have not been
registered under the Securities Act or any state securities laws an
may not be offered or sold in the United States absent registration
or an applicable exemption from the registration requirements of
the Securities Act and applicable state laws. This press release
shall not constitute an offer to sell or a solicitation of an offer
to purchase the 2026 Secured Notes or any other securities, and
shall not constitute an offer, solicitation or sale in any state or
jurisdiction in which such an offer, solicitation or sale would be
unlawful.
Forward Looking Statements
This press release includes “forward-looking statements.” All
statements other than statements of historical facts included or
incorporated herein may constitute forward-looking statements.
Actual results could vary significantly from those expressed or
implied in such statements and are subject to a number of risks and
uncertainties. While NGL believes such forward-looking statements
are reasonable, NGL cannot assure they will prove to be correct.
The forward-looking statements involve risks and uncertainties that
affect operations, financial performance, and other factors as
discussed in filings with the Securities and Exchange Commission.
Other factors that could impact any forward-looking statements are
those risks described in NGL’s annual report on Form 10-K,
quarterly reports on Form 10-Q, and other public filings. You are
urged to carefully review and consider the cautionary statements
and other disclosures made in those filings, specifically those
under the heading “Risk Factors.” NGL undertakes no obligation to
publicly update or revise any forward-looking statements except as
required by law.
About NGL Energy Partners LP
NGL Energy Partners LP, a Delaware limited partnership, is a
diversified midstream energy company that transports, stores,
markets and provides other logistics services for crude oil,
natural gas liquids and other products and transports, treats and
disposes of produced water generated as part of the oil and natural
gas production process. For further information, visit the
Partnership’s website at www.nglenergypartners.com.
This release is a qualified notice under Treasury Regulation
Section 1.1446-4(b). Brokers and nominees should treat 100% of NGL
Energy Partner LP’s distributions to foreign investors as being
attributable to income that is effectively connected with a United
States trade or business. Therefore, distributions to foreign
investors are subject to federal income tax withholding at the
highest applicable effective tax rate.
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version on businesswire.com: https://www.businesswire.com/news/home/20210204006096/en/
NGL Energy Partners LP
Trey Karlovich, 918.481.1119 Executive Vice President and Chief
Financial Officer Trey.Karlovich@nglep.com or Linda Bridges,
918.481.1119 Senior Vice President – Finance and Treasurer
Linda.Bridges@nglep.com
NGL Energy Partners (NYSE:NGL)
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