NGL Energy Partners LP (NYSE:NGL) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
Purchase Agreement
On February16, 2017, NGL Energy Partners LP (the Partnership) and
NGL Energy Finance Corp. (Finance Corp. and together with the
Partnership, the Issuers) entered into a purchase agreement (the
Purchase Agreement) with RBC Capital Markets, LLC and Deutsche
Bank Securities Inc., as representatives of the initial
purchasers listed on Schedule1 to the Purchase Agreement
(collectively, the Initial Purchasers) related to the issuance
and sale by the Issuers to the Initial Purchasers of $500,000,000
aggregate principal amount of the Issuers 6.125% Senior Notes due
2025 (the Notes). The Issuers obligations thereunder are fully,
unconditionally, jointly and severally guaranteed on an
unsubordinated and unsecured basis, by certain of the
Partnerships subsidiaries (collectively, the Guarantors, and
together with the Issuers, the Obligors).
The Notes and the guarantees thereof (collectively, the
Securities) were offered and sold in a private offering (the
Offering) conducted to Rule144A and Regulation S under the
Securities Act of 1933, as amended (the Securities Act). The
offer and sale of the Securities have not been registered under
the Securities Act or applicable state securities laws, and
consequently, the Securities may not be offered or sold in the
United States absent registration under the Securities Act or an
applicable exemption from the registration requirements of the
Securities Act and applicable state laws.
The Purchase Agreement contains customary representations and
warranties of the parties and indemnification and contribution
provisions under which the Obligors, on one hand, and the Initial
Purchasers, on the other hand, have agreed to indemnify each
other against certain liabilities, including liabilities under
the Securities Act.
Closing of the Offering and delivery of the Securities to the
Purchase Agreement occurred on February22, 2017. The Issuers
received net proceeds from the issuance and sale of the
Securities of approximately $491.0 million, after deducting the
Initial Purchasers discount and estimated expenses associated
with the Offering. The Partnership intends to use the net
proceeds of the Offering to repay borrowings under its credit
agreement.
A copy of the Purchase Agreement is filed as Exhibit1.1 hereto,
and is incorporated herein by reference. The description of the
Purchase Agreement in this Form8-K is a summary and is qualified
in its entirety by the terms of the Purchase Agreement.
Indenture
The Securities were issued to an indenture, dated February22,
2017 (the Indenture), by and among the Obligors and U.S. Bank
National Association, as trustee (the Trustee). The Notes accrue
interest from February22, 2017 at a rate of 6.125% per year.
Interest on the Notes is payable semi-annually in arrears on
March1 and September1 of each year, beginning September1, 2017.
The Notes mature on March1, 2025.
On or after March1, 2020, the Issuers may redeem all or part of
the Notes at a redemption price equal to 50% of the principal
amount of the notes redeemed plus accrued and unpaid interest, if
any, on the notes redeemed to but excluding the redemption date.
Prior to March1, 2020, the Issuers may redeem all or a part of
the Notes at a redemption price equal to the Make-Whole Price,
subject to the rights of holders of Notes on the relevant record
date to receive interest due on the relevant interest payment
date.
Make-Whole Pricewith respect to any Notes to be
redeemed, means an amount equal to the greater of:
(1)50% of the principal amount of such Note, and
(2)the sum of the present values of (a)the redemption price of
such notes at March1, 2020 and (b)the remaining scheduled
payments of interest from the redemption date to March1, 2020
(not including any portion of such payments of interest accrued
as of the redemption date) discounted back to the redemption date
on a semi-
annual basis (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Rate (as defined in the
Indenture) plus 50 basis points;
plus, in the case of both (1)and (2), accrued and unpaid
interest on such Notes, if any, to the redemption date.
If the Issuers experience certain kinds of changes of control
(which in certain cases may require the change of control event
to be followed by a rating decline), 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 holders Notes to an offer on the
terms set forth in the Indenture. The Partnership 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 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. Upon an event of default under the Indenture, the
Trustee or the holders of at least 25% in aggregate principal
amount of the Notes then outstanding may declare all amounts
owing under the Notes to be due and payable.
A copy of the Indenture is filed as Exhibit4.1 hereto, and the
form of the Global Notes included as Exhibits A1 and A2 to the
Indenture are filed as Exhibit4.2 hereto, and each is
incorporated herein by reference. The description of the
Indenture and the Securities in this Form8-K is a summary and
is qualified in its entirety by the terms of the Indenture.
Registration Rights Agreement
On February22, 2017, in connection with the closing of this
offering of the Notes, the Obligors entered into a registration
rights agreement with RBC Capital Markets, LLC and Deutsche
Bank Securities Inc., as representatives of the Initial
Purchasers (the Registration Rights Agreement). Under the
Registration Rights Agreement, the Obligors have agreed to,
among other things, use their commercially reasonable efforts
to (i)file an exchange offer registration statement with
respect to the exchange notes and the exchange guarantees,
(ii)cause such exchange offer registration statement to become
effective on or prior to 365 days after the closing of this
offering and (iii)keep such exchange offer registration
statement effective continuously and keep the exchange offer
period open for a period of not less than the period required
under applicable United States federal and state securities
laws to consummate the exchange offer (provided that such
period shall not be less than 20 business days after the date
on which the notice of the exchange offer is mailed to holders
of the Notes). If, among other things, such exchange offer
registration statement is not filed or declared effective by
the United States Securities and Exchange Commission by the
required time, or the exchange offer has not been consummated
within 30 business days following the targeted date of
effectiveness (as set forth in the Registration Rights
Agreement), the Obligors will be required to pay to the holders
of the Notes liquidated damages in an amount equal to 0.25% per
annum on the principal amount of the Notes held by such holder
during the 90-day period immediately following the occurrence
of such registration default, and such amount shall increase by
0.25% per annum at the end of such 90-day period.
A copy of the Registration Rights Agreement is filed as
Exhibit4.3 hereto and is incorporated herein by reference. The
description of the Registration Rights Agreement in this
Form8-K is a summary and is qualified in its entirety by the
terms of the Registration Rights Agreement.
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
Form8-K is incorporated by reference into this Item 2.03 of
this Current Report on Form8-K.
Item 9.01 Financial Statements and
Exhibits.
(d)Exhibits.
|
Exhibit Number |
|
Description |
|
1.1 |
Purchase Agreement, dated February16, 2017, by and among |
|
|
4.1 |
Indenture, dated as of February22, 2017, by and among NGL |
|
|
4.2 |
Forms of 6.125% Senior Notes due 2025 (included as |
|
|
4.3 |
Registration Rights Agreement, dated as of February22, |
About NGL Energy Partners LP (NYSE:NGL)
NGL Energy Partners LP owns and operates a vertically integrated energy business. The Company’s segments are crude oil logistics, water solutions, liquids, retail propane, refined products and renewables, and corporate and other. Its crude oil logistics segment includes owned and leased crude oil storage terminals, and owned and leased pipeline injection stations. Its water solutions segment provides services for the treatment and disposal of wastewater generated from crude oil and natural gas production, and for the disposal of solids, such as tank bottoms and drilling fluids. Its liquids segment supplies natural gas liquids to retailers, wholesalers, refiners and petrochemical plants throughout the United States and in Canada. Its retail propane segment consists of the retail marketing, and sale and distribution of propane and distillates, among others. The Company’s refined products and renewables segment is engaged in gasoline, diesel, ethanol and biodiesel marketing operations. NGL Energy Partners LP (NYSE:NGL) Recent Trading Information
NGL Energy Partners LP (NYSE:NGL) closed its last trading session down -0.25 at 23.20 with 1,314,673 shares trading hands.
