HOUSTON, Sept. 29, 2020 /PRNewswire/ -- Summit
Midstream Partners, LP (NYSE: SMLP) announced today that its wholly
owned, indirect subsidiary, Summit Midstream Partners Holdings, LLC
("SMP Holdings"), has entered into a Transaction Support Agreement
("TSA") with an ad hoc group of SMP Holdings' lenders (the "Ad Hoc
Group"), who collectively hold approximately 66% of the
$155.2 million outstanding balance
under the Term Loan Agreement, dated as of March 21, 2017, among SMP Holdings, as borrower,
the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as Administrative Agent
and Collateral Agent (the "Term Loan"). The Ad Hoc Group has
agreed to a consensual Term Loan restructuring transaction (the "TL
Restructuring"), as further described below, which is anticipated
to close in the fourth quarter of 2020.
Pursuant to the TSA, the Ad Hoc Group has agreed to support and
vote in favor of the TL Restructuring, which will be implemented
through an out-of-court strict foreclosure process. SMLP will
be engaging with additional Term Loan lenders over the coming weeks
and expects to secure the full support from the Term Loan lenders
to close the TL Restructuring. Upon closing the TL
Restructuring, the lenders will waive their rights to any and all
claims against SMP Holdings and its affiliates, including a release
of the non-economic GP Interest in SMLP from its collateral
package.
The TL Restructuring will occur concurrently with the execution
of definitive documentation to fully settle the $180.75 million deferred purchase price
obligation (the "DPPO") that SMLP owes to SMP Holdings. In
connection with the DPPO settlement, SMLP will make a $26.5 million cash payment to fully satisfy the
DPPO. Following this payment, the DPPO will be fully repaid
and will cease to exist. SMP Holdings will utilize the
$26.5 million of cash consideration
together with the 34.6 million SMLP common units that are currently
owned by SMP Holdings and pledged to the Term Loan lenders to fully
satisfy the Term Loan obligations. Following this payment,
the Term Loan will be fully repaid and will cease to exist.
As a result of the TL Restructuring, SMP Holdings' $155.2 million Term Loan balance will be retired
at a discount of approximately 68% to face value based on the terms
of the TSA and assuming SMLP's common unit closing price of
$0.69 on September 28, 2020. Additionally, upon
settlement of the DPPO, and in conjunction with SMLP's other
liability management initiatives, approximately $454 million face value of obligations recourse
to SMLP will have been retired or exchanged at a weighted average
discount of approximately 64%. SMLP's year-to-date liability
management activities, including open market bond repurchases, the
previously-announced exchange offer for Series A Preferred Units of
SMLP, the previously-announced public tender offers for the senior
notes of Summit Midstream Holdings, LLC and Summit Midstream
Finance Corp. and now the TL Restructuring, have been successful in
reducing outstanding debt and other future obligations while
facilitating common equity value accretion.
Heath Deneke, President, Chief
Executive Officer and Chairman commented, "I'm pleased to announce
that we have reached an agreement with the Ad Hoc Group of Term
Loan lenders to exchange the proceeds from the DPPO payment for the
full retirement of the Term Loan. This transaction represents
another transformational development for our organization, which
will further simplify SMLP's capital structure and significantly
enhance our financial flexibility. Similar to our other
recently announced liability management initiatives, we expect the
full retirement of these liabilities to be accretive to our common
unitholders. Collectively over the past four months, SMLP has
reduced the face value of its fixed-income capital and obligations
by $454 million, or approximately 35%
of the $1.3 billion aggregate balance
comprised of unsecured notes, Series A Preferred Equity and the
DPPO as of closing of the GP Buy-In Transaction, while capturing
approximately $291 million of value
for our stakeholders through liability management initiatives."
About Summit Midstream Partners, LP
SMLP is a value-driven limited partnership focused on
developing, owning and operating midstream energy infrastructure
assets that are strategically located in unconventional resource
basins, primarily shale formations, in the continental United
States. SMLP provides natural gas, crude oil and produced
water gathering services pursuant to primarily long-term and
fee-based gathering and processing agreements with customers and
counterparties in six unconventional resource basins: (i) the
Appalachian Basin, which includes the Utica and Marcellus shale formations in
Ohio and West Virginia; (ii) the Williston Basin, which includes the Bakken and
Three Forks shale formations in North
Dakota; (iii) the Denver-Julesburg Basin, which includes the
Niobrara and Codell shale
formations in Colorado and
Wyoming; (iv) the Permian Basin,
which includes the Bone Spring and Wolfcamp formations in
New Mexico; (v) the Fort Worth Basin, which includes the Barnett
Shale formation in Texas; and (vi)
the Piceance Basin, which includes the Mesaverde formation as well
as the Mancos and Niobrara shale formations in Colorado.
SMLP has an equity investment in Double E Pipeline, LLC, which is
developing natural gas transmission infrastructure that will
provide transportation service from multiple receipt points in the
Delaware Basin to various delivery
points in and around the Waha Hub in Texas. SMLP also has an
equity investment in Ohio Gathering, which operates extensive
natural gas gathering and condensate stabilization infrastructure
in the Utica Shale in Ohio. SMLP is headquartered in
Houston, Texas.
Forward-Looking Statements
This press release includes certain statements concerning
expectations for the future that are forward-looking within the
meaning of the federal securities laws. Forward-looking
statements include, without limitation, any statement that may
project, indicate or imply future results, events, performance or
achievements, such as the completion of the proposed TL
Restructuring, the full settlement of the DPPO and the full
settlement and termination of the Term Loan, and may contain the
words "expect," "intend," "plan," "anticipate," "estimate,"
"believe," "will be," "will continue," "will likely result," and
similar expressions, or future conditional verbs such as "may,"
"will," "should," "would," and "could." Forward-looking
statements also contain known and unknown risks and
uncertainties (many of which are difficult to predict and
beyond management's control) that may cause SMLP's actual
results in future periods to differ materially from anticipated or
projected results. An extensive list of specific
material risks and uncertainties affecting SMLP is contained in its
2019 Annual Report on Form 10-K filed with the Securities and
Exchange Commission on March 9, 2020, Quarterly Report on
Form 10-Q for the three months ended March
31, 2020 filed with the Securities Exchange Commission on
May 8, 2020, and Quarterly Report on
Form 10-Q for the three months ended June
30, 2020 filed with the Securities Exchange Commission on
August 10, 2020, each as amended and
updated from time to time. Any forward-looking statements in this
press release, are made as of the date of this press release and
SMLP undertakes no obligation to update or revise any
forward-looking statements to reflect new information or
events.
SMLP is actively engaging in various liability management
transactions, including the TL Restructuring discussed above and
the recently consummated cash tender offers for its outstanding
senior notes. SMLP intends to continue to evaluate other liability
management initiatives, as well as potential asset sales or other
divestitures of assets. There is no assurance that any of these
asset sales or other divestitures will be completed. Other
liability management initiatives may involve amendments to SMLP's
revolving credit facility and/or additional repurchases of senior
notes through open market purchases, privately negotiated
transactions, redemptions, additional tender offers, exchange
offers or otherwise.
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SOURCE Summit Midstream Partners, LP