Item 1.01 Entry into a Material Definitive Agreement.
Indenture
On August 18, 2020, in connection with the previously announced offering (the
"Offering") and issuance by Targa Resources Partners LP (the "Partnership"), a
subsidiary of Targa Resources Corp., and its wholly-owned subsidiary, Targa
Resources Partners Finance Corporation ("Finance Corp" and, together with the
Partnership, the "Issuers") of $1,000,000,000 in aggregate principal amount of
the Issuers' 4 7/8% senior unsecured notes due 2031 (the "Notes"), the
Partnership entered into an Indenture (the "Indenture"), among the Issuers,
certain subsidiary guarantors named therein (the "Guarantors") and U.S. Bank
National Association, as trustee (the "Trustee").
On August 18, 2020, the Notes were issued pursuant to the Indenture in a
transaction exempt from the registration requirements under the Securities Act
of 1933, as amended (the "Securities Act"). The Notes were resold within the
United States only to qualified institutional buyers in reliance on Rule 144A
under the Securities Act, and outside the United States only to non-U.S. persons
in reliance on Regulation S under the Securities Act.
The Notes will mature on February 1, 2031, and interest is payable on the Notes
semi-annually in arrears on each February 1 and August 1, commencing February 1,
2021. The Notes are guaranteed on a senior unsecured basis by the Guarantors.
At any time prior to February 1, 2024, the Issuers may redeem up to 35% of the
Notes at a redemption price of 104.875% of the principal amount of the Notes
redeemed, plus accrued and unpaid interest and Liquidated Damages (as such term
is defined in the Indenture), if any, to the redemption date, in an amount not
greater than the proceeds of certain equity offerings so long as the redemption
of the Notes occurs within 180 days of completing such equity offering and at
least 65% of the aggregate principal amount of the Notes remains outstanding
after such redemption. Prior to February 1, 2026, the Issuers may redeem some or
all of the Notes for cash at a redemption price equal to 100% of their principal
amount plus an applicable make whole premium and accrued and unpaid interest and
Liquidated Damages, if any, to the redemption date.
On or after February 1, 2026, the Issuers may redeem some or all of the Notes at
the redemption prices (expressed as percentages of principal amount) set forth
below plus accrued and unpaid interest and Liquidated Damages, if any, to the
redemption date if redeemed during the twelve-month period beginning on
February 1 of each year indicated below:
Year Percentage
2026 102.438 %
2027 101.625 %
2028 100.813 %
2029 and thereafter 100.000 %
The Indenture restricts the Partnership's ability and the ability of certain of
its subsidiaries to: (i) incur additional debt; (ii) pay distributions on, or
repurchase, equity interests; (iii) make certain investments; (iv) incur liens;
(v) enter into transactions with affiliates; (vi) merge or consolidate with
another company; and (vii) transfer and sell assets. These covenants are subject
to a number of important exceptions and qualifications. If at any time
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when the Notes are rated investment grade by either of Moody's Investors
Service, Inc. or S&P Global Ratings and no Default (as defined in the Indenture)
has occurred and is continuing, many of such covenants will terminate and the
Partnership and its subsidiaries will cease to be subject to such covenants. The
Indenture provides that each of the following is an Event of Default:
(i) default for 30 days in the payment when due of interest on, or liquidated
damages, if any, with respect to, the Notes; (ii) default in the payment when
due of the principal of, or premium, if any, on the Notes; (iii) failure by the
Issuers or any Guarantor to make a change of control offer or an asset sale
offer within the requisite time periods, to consummate a purchase of Notes when
required under the Indenture or to comply with certain covenants relating to
merger, consolidation or sale of assets; (iv) failure by the Partnership to
comply for 90 days after notice with the provisions of the Indenture relating to
periodic reports of the Partnership as required by the Securities Exchange Act
of 1934; (v) failure by the Issuers or any Guarantor to comply for 60 days after
written notice with any of the other agreements in the Indenture; (vi) default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any indebtedness for money borrowed
by the Partnership or any of the Partnership's restricted subsidiaries (or the
payment of which is guaranteed by the Partnership or any of its restricted
subsidiaries), if that default: (a) is caused by a failure to pay principal of,
or interest or premium, if any, on such indebtedness prior to the expiration of
the grace period provided in such indebtedness on the date of such default (a
"Payment Default"); or (b) results in the acceleration of such indebtedness
prior to its stated maturity, and, in each case, the principal amount of any
such indebtedness, together with the principal amount of any other such
indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates in excess of 3.0% of the Partnership's
consolidated net tangible assets, provided, however, that if, prior to any
acceleration of the Notes, (a) any such Payment Default is cured or waived,
(b) any such acceleration of such indebtedness is rescinded, or (c) such
indebtedness is repaid during the 30 day period commencing upon the end of any
applicable grace period for such Payment Default or the occurrence of such
acceleration of such indebtedness, as applicable, any default or event of
default (but not any acceleration of the Notes) caused by such Payment Default
or acceleration of such indebtedness shall automatically be rescinded, so long
as such rescission does not conflict with any judgment, decree or applicable
law; (vii) failure by either Issuer or any of the Partnership's restricted
subsidiaries to pay final judgments aggregating in excess of 3.0% of the
Partnership's consolidated net tangible assets, which judgments are not paid,
discharged or stayed for a period of 60 days; (viii) except as permitted by the
Indenture, any subsidiary guarantee shall be held in any judicial proceeding to
be unenforceable or invalid or shall cease for any reason to be in full force
and effect or any Guarantor, or any person acting on behalf of any Guarantor,
shall deny or disaffirm its obligations under its guarantee of the Notes; and
(ix) certain events of bankruptcy or insolvency described in the Indenture with
respect to the Issuers or any of the Partnership's significant subsidiaries or
any group of restricted subsidiaries that, taken as a whole, would constitute a
significant subsidiary. In the case of an Event of Default described in the
preceding clause (ix), all outstanding Notes will become due and payable
immediately without further action or notice. If any other Event of Default
. . .
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information included in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.03 of this Current Report on Form
8-K.
Item 8.01 Other Events
On August 17, 2020, the Partnership issued a press release announcing the
expiration and final results of the Tender Offer. A copy of the Partnership's
press release is filed as Exhibit 99.1 hereto and is incorporated by reference
into this Item 8.01.
The press release shall not constitute an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of these securities in any state in
which the offer, solicitation or sale of such securities would be unlawful prior
to registration or qualification under the securities laws of any such state.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
4.1 Indenture dated as of August 18, 2020 among the Issuers, the
Guarantors and U.S. Bank National Association, as trustee
(incorporated by reference to Exhibit 4.1 to Targa Resources Partners
LP's Current Report on Form 8-K (File No. 001-33303) filed August 21,
2020).
4.2 Registration Rights Agreement dated as of August 18, 2020 among the
Issuers, the Guarantors and Wells Fargo Securities, LLC, as
representative of the several Initial Purchasers party thereto
(incorporated by reference to Exhibit 4.2 to Targa Resources Partners
LP's Current Report on Form 8-K (File No. 001-33303) filed August 21,
2020).
99.1 Press Release dated August 17, 2020, announcing the expiration and
final results of the Tender Offer (incorporated by reference to
Exhibit 99.1 to Targa Resources Partners LP's Current Report on Form
8-K (File No. 001-33303) filed August 21, 2020).
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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