ARCHROCK,INC. (NYSE:AROC) Files An 8-K Entry into a Material Definitive Agreement

ARCHROCK,INC. (NYSE:AROC) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement

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Indenture

On March21, 2019, our wholly owned subsidiaries, Archrock Partners, L.P. (the “Partnership”) and Archrock Partners Finance Corp. (“Finance Corp.” and, together with the Partnership, the “Issuers”), completed a private offering (the “Notes Offering”) of $500,000,000 aggregate principal amount of 6.875% senior notes due 2027 (the “Notes”), along with the related guarantees of the Notes (the “Guarantees”).

The Notes and Guarantees were issued to an indenture (the “Indenture”), dated March21, 2019, among the Issuers, Archrock,Inc. (the “Company”), certain subsidiaries (other than the Issuers) of the Company party thereto (collectively with the Company, the “Guarantors”) and Wells Fargo Bank, National Association, as trustee (the “Trustee”).

The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by the Guarantors. The Notes and the Guarantees rank equally in right of payment with all of the Issuers’ and the Guarantors’ existing and future senior indebtedness.

Interest on the Notes is payable semi-annually in arrears on April1 and October1 of each year, beginning October1, 2019, at a rate of 6.875% per year. The Notes mature on April1, 2027.

At any time prior to April1, 2022, the Issuers may redeem all or part of the Notes, at a redemption price equal to 50% of the principal amount of the Notes plus a “make-whole” premium plus accrued and unpaid interest, if any, to, but not including, the redemption date. At any time prior to April1, 2022, the Issuers may also redeem up to 35% of the aggregate principal amount of the Notes with an amount of cash not greater than the net cash proceeds from one or more equity offerings, at a redemption price of 106.875% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but not including, the redemption date, as long as at least 65% of the aggregate principal amount of the Notes originally issued on the issue date (excluding notes held by the Company and its subsidiaries) remains outstanding after each such redemption and the redemption occurs within 180 days after the date of the closing of such equity offering.

On or after April1, 2022, the Issuers may redeem all or part of the Notes at the redemption prices set forth below, plus accrued and unpaid interest, if any, to, but not including, the redemption date, beginning on April1 of the years indicated below:

Year

Percentage

105.156

%

103.438

%

101.719

%

2025 and thereafter

100.000

%

The Indenture contains covenants that will limit the ability of the Company and its restricted subsidiaries, including the Issuers, to (i)make distributions on, purchase or redeem the Company’s common stock or repurchase or redeem subordinated indebtedness; (ii)make investments; (iii)incur, assume or guarantee additional indebtedness or issue preferred stock; (iv)create liens to secure indebtedness; (v)sell or otherwise dispose of assets; (vi)consolidate with or merge with or into, or sell its properties to, another person; (vii)enter into transactions with affiliates; and (viii)create unrestricted subsidiaries. These covenants are subject to important exceptions and qualifications. If the Notes achieve an investment grade rating from each of Moody’s Investors Service,Inc. and S&P Global Ratings and no default under the Indenture exists, many of the foregoing covenants will terminate.

The Indenture also contains customary events of default, including (i)default for 30 days in the payment when due of interest on the Notes; (ii)default in payment when due of principal of or premium, if any, on the Notes; (iii)covenant defaults, (iv)cross-defaults to certain indebtedness and (v)certain events of bankruptcy or insolvency with respect to the Company or any of the Guarantors (including the Issuers). If an event of default arises from certain events of bankruptcy, insolvency or reorganization, with respect to the Issuers, the Company, any restricted subsidiary of the Company that is a significant subsidiary or any group of restricted subsidiaries of the Company that, taken together, would constitute a significant subsidiary of the Company, all outstanding Notes will become due and payable immediately without further action or notice. If an event of default occurs and is continuing, the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately.

If the Partnership experiences certain kinds of changes of control, holders of the Notes will be entitled to require the Partnership to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess of $2,000) of that holder’s Notes to an offer on the terms set forth in the Indenture. The Company will offer to make a cash payment equal to 101% of the

aggregate principal amount of the Notes repurchased plus accrued and unpaid interest on the Notes repurchased to, but not including, the date of purchase, subject to the rights of holders of the Notes on the relevant record date to receive interest due on the relevant interest payment date.

The summary of the Indenture set forth in this Item 1.01 does not purport to be complete and is qualified by reference to such agreement, a copy of which is being filed as Exhibit4.1 hereto and is incorporated herein by reference.

Credit Agreement Joinder

On March21, 2019, our wholly owned subsidiaries, Archrock GP LLC, a Delaware limited liability company (“Archrock GP”), Archrock Partners Corp., a Delaware corporation (“Archrock Corp.”), and Archrock General Partner, L.P., a Delaware limited partnership (collectively with Archrock GP and Archrock Corp., the “Archrock Subsidiaries”), entered into an omnibus joinder agreement dated March21, 2019 (the “Credit Agreement Joinder”) to the Credit Agreement, dated as of March30, 2017, by and among Archrock Partners Operating LLC and Archrock Services, L.P., as borrowers (the “Borrowers”), the Parent, certain subsidiaries of the Parent, as guarantors, and JPMorgan Chase Bank, N.A. (the “Administrative Agent”) and the other agents and lenders signatory thereto, as amended by Amendment No.1 thereto dated as of February23, 2018 (the “Credit Agreement”). Under the Credit Agreement Joinder, the Archrock Subsidiaries agreed to become guarantors of the Borrowers’ current and future obligations under the Credit Agreement. Each of the Archrock Subsidiaries will also pledge substantially all of its assets to the Administrative Agent as security for the payment and performance of the Secured Obligations (as defined in the Credit Agreement) through a Security Agreement Supplement.

The above description of the Credit Agreement Joinder does not purport to be a complete statement of the parties’ rights and obligations under the Credit Agreement Joinder and is qualified in its entirety by reference to the terms of the Credit Agreement Joinder, a copy of which is attached hereto as Exhibit10.1 and incorporated by reference herein.

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 hereof is incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On March21, 2019, the Company issued a press release announcing the closing of the Notes Offering. A copy of the press release is furnished herewith as Exhibit99.1 and is incorporated herein by reference.

The information included in this Item 7.01 and Exhibit99.1 attached hereto are being furnished and shall not be deemed “filed” for the purpose of Section18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information included in this Item 7.01 and Exhibit99.1 attached hereto shall not be incorporated by reference into any registration statement or other document to the Securities Act of 1933, as amended.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

ExhibitNumber

Description

4.1

Indenture, dated as of March21, 2019, by and among Archrock Partners, L.P., Archrock Partners Finance Corp., the guarantors party thereto and Wells Fargo Bank, National Association, as trustee.

10.1

Omnibus Joinder Agreement, dated as of March21, 2019, by and among Archrock GP LLC, Archrock Partners Corp., Archrock General Partner, L.P. and JPMorgan Chase Bank, N.A.

99.1

Archrock,Inc. press release dated March21, 2019.

Archrock, Inc. Exhibit
EX-4.1 2 a19-6140_2ex4d1.htm EX-4.1 Exhibit 4.1   Execution Version     ARCHROCK PARTNERS,…
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About ARCHROCK,INC. (NYSE:AROC)

Archrock, Inc., formerly Exterran Holdings, Inc., is a natural gas contract operations services company. The Company also provides natural gas compression services to customers in the oil and natural gas industry throughout the United States and supplies aftermarket services to customers that own compression equipment in the United States. The Company’s segments include contract operations and aftermarket services. The contract operations segment primarily provides natural gas compression services to meet specific customer requirements. The aftermarket services segment sells parts and components, and provides operation, maintenance, overhaul and reconfiguration services to customers having compression and oilfield power generation equipment. The Company also has equity interest in Archrock Partners, L.P. (the Partnership), a master limited partnership that provides natural gas contract operations services to customers throughout the United States.

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