NGL ENERGY PARTNERS LP (NYSE:NGL) Files An 8-K Entry into a Material Definitive Agreement

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.

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Underwriting Agreement

On March26, 2019, NGL Energy Partners LP (the “Partnership”) entered into an underwriting agreement (the “Underwriting Agreement”) with RBC Capital Markets, LLC, Morgan Stanley& Co. LLC and UBS Securities LLC, as representatives of the several underwriters named therein (collectively, the “Underwriters”), pertaining to an underwritten public offering (the “ClassC Preferred Unit Offering”) of 9.625% ClassC Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units, representing limited partner interests in the Partnership (“ClassC Preferred Units”). to the Underwriting Agreement, the Partnership agreed to sell 1,600,000 9.625% ClassC Preferred Units (the “Firm Units”) at a price to the public of $25.00 per ClassC Preferred Unit. Closing of the issuance and sale of the Firm Units is scheduled for April2, 2019. to the Underwriting Agreement, the Partnership granted the Underwriters a 30-day option to purchase up to an additional 240,000 ClassC Preferred Units at the same price and on the same terms and conditions as the Firm Units. The initial distribution rate for the ClassC Preferred Units from and including the date of original issue to, but not including April15, 2024, will be 9.625% per annum of the $25.00 liquidation preference per unit (equal to $2.40625 per unit per annum). On and after April15, 2024, distributions on the ClassC Preferred Units will accumulate at a percentage of the $25.00 liquidation preference equal to the applicable three-month LIBOR plus a spread of 738.4 basis points. The Partnership will receive net proceeds from the offering of approximately $38,240,000 million, after deducting the Underwriters’ discount and estimated offering expenses payable by the Partnership, assuming the Underwriters do not exercise their option to purchase any additional ClassC Preferred Units. The Partnership expects to use the net proceeds of the ClassC Preferred Unit Offering to repay indebtedness under its Amended and Restated Credit Agreement, dated as of February14, 2017, by and among the Partnership, NGL Energy Operating LLC, as borrowers’ agent, the subsidiary borrowers party thereto, the subsidiary guarantors party thereto, the lenders party thereto, Deutsche Bank AG, New York Branch, as technical agent, and Deutsche Bank Trust Company Americas, as administrative agent and as collateral agent (as amended, the “Credit Agreement”), which it may re-borrow from time to time for general partnership purposes, including to redeem or repurchase all or a portion of its outstanding 10.75% ClassA Convertible Preferred Units (the “ClassA Preferred Units”). The Partnership has agreed to redeem approximately $90 million of the ClassA Preferred Units with the net proceeds from the ClassC Preferred Unit Offering and borrowings available under the Credit Agreement for a total redemption cost of $100 million.

The ClassC Preferred Unit Offering has been registered under the Securities Act of 1933, as amended (the “Securities Act”), to an effective registration statement on FormS-3 (Registration No.333-216079) of the Partnership, as amended by Post-Effective Amendment No.1 thereto, and the prospectus supplement dated March26, 2019, filed with the United States Securities and Exchange Commission to Rule424(b)under the Securities Act.

The Underwriting Agreement contains customary representations, warranties and agreements by the Partnership, and customary termination provisions, and it provides that the obligations of the Underwriters to purchase the ClassC Preferred Units are subject to customary closing conditions. The Underwriting Agreement also includes customary indemnification provisions to which the Partnership has agreed to indemnify the Underwriters against certain liabilities and expenses, including liabilities under the Securities Act, or to contribute to payments the Underwriters may be required to make because of any of the those liabilities.

The summary of the Underwriting Agreement in this report does not purport to be complete and is qualified by reference to such agreement, which is filed as Exhibit1.1 hereto.

Waiver, Consent, Redemption and Amendment Agreement

In connection with the ClassC Preferred Unit Offering, on March26, 2019, the Partnership entered into a Waiver, Consent, Redemption and Amendment Agreement (the “Agreement”) with Highstar NGL Prism/IV-A Interco LLC, Highstar NGL Main Interco LLC, NGL CIV A, LLC, NGL Prism/IV-A Blocker LLC (collectively, the “ClassA Preferred Unitholders”), such entities being the collective holders of 50% of the Partnership’s outstanding ClassA Preferred Units, and Highstar Capital IV, L.P. (“Highstar”). to the Agreement, the ClassA Preferred Unitholders agreed to waive their preemptive rights held with respect to the ClassC Preferred Unit Offering. Additionally, the Partnership agreed to redeem the maximum amount of ClassA Preferred Units that may be redeemed with an amount equal to the sum of net proceeds from the ClassC Preferred Unit Offering and borrowings available for that purpose under the Credit Agreement (the “Available Redemption Funds”). Further, to the Agreement, the ClassA Preferred Unitholders have consented to amendments to the Fourth Amended and Restated Agreement of Limited Partnership of the Partnership (the “Partnership Agreement”) as are necessary to provide for: (i)a decrease in the amount of the redemption premium that would be payable to the holders of ClassA Preferred Units upon a redemption of ClassA Preferred Units occurring after on or after April1,

2019 and on or prior to May13, 2019 from 115% to 111.25% of the ClassA Preferred Unit Price (as defined in the Partnership Agreement); and (ii)redemption of all or less than all of the issued and outstanding ClassA Preferred Units.

to the Agreement, each of (i)the Registration Rights Agreement, dated as of May11, 2016, by and among the Partnership, the ClassA Preferred Holders and Highstar, (ii)the Amended and Restated Board Representation and Observation Rights Agreement, dated as of June24, 2016, entered into by and among NGL Energy Holdings LLC, the Partnership, the ClassA Preferred Unitholders and Highstar, as amended, and (iii)the 2016 Warrants issued by the Partnership, has been amended to preserve certain rights of the ClassA Preferred Unitholders in the event of a partial redemption of the ClassA Preferred Units.

The Agreement will terminate and be null and void ab initio in its entirety in the event that the first closing of the ClassC Preferred Unit Offering does not occur on or prior to April20, 2019.

A member of the Board of Directors of the Partnership’s general partner, Jared Parker, is a Managing Director of Oaktree Capital Management L.P., which manages the funds comprising the ClassA Preferred Unitholders.

The summary of the Agreement in this report does not purport to be complete and is qualified by reference to such agreement, which is filed as Exhibit10.1 hereto.

First Amendment to the Agreement

On March26, 2019, the Partnership entered into the First Amendment to the Agreement with the ClassA Preferred Unitholders and Highstar (the “Amendment”). to the Amendment, the Available Redemption Funds were capped at $100 million.

The summary of the Amendment in this report does not purport to be complete and is qualified by reference to such agreement, which is filed as Exhibit10.2 hereto.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

ExhibitNo.

Description

1.1

Underwriting Agreement, dated March26, 2019, by and among NGL Energy Partners LP and the Underwriters named therein.

10.1

Waiver, Consent, Redemption and Amendment Agreement, dated March26, 2019, by and among NGL Energy Partners LP, the ClassA Preferred Unitholders and Highstar.

10.2

First Amendment to Waiver, Consent, Redemption and Amendment Agreement, dated March 26, 2019, by and among NGL Energy Partners LP, the Class A Preferred Unitholders and Highstar.

NGL Energy Partners LP Exhibit
EX-1.1 2 a19-6974_5ex1d1.htm EX-1.1 Exhibit 1.1   EXECUTION VERSION   NGL ENERGY PARTNERS LP   9.625% Class C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units   Representing Limited Partner Interests   UNDERWRITING AGREEMENT   Dated: March 26,…
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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.

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