Tallgrass Energy GP, LP (NYSE:TEGP) Files An 8-K Entry into a Material Definitive Agreement

ME Staff 8-k

7 years ago

Tallgrass Energy GP, LP (NYSE:TEGP) Files An 8-K Entry into a Material Definitive Agreement

Item1.01.

Entry into a Material Definitive Agreement.

Purchase Agreement

On May11, 2017, Tallgrass Energy Partners, LP (TEP), Tallgrass
Energy Finance Corp., a wholly owned subsidiary of TEP (the
Co-Issuer and
together with TEP, the Issuers), and certain of TEPs existing
direct and indirect wholly owned subsidiaries (other than the
Co-Issuer, the Guarantors), entered into a purchase agreement
(the Purchase Agreement) with Credit Suisse Securities (USA) LLC,
as representative of the several initial purchasers named therein
(the Initial Purchasers), to which the Issuers agreed to sell an
additional $350,000,000 in aggregate principal amount of the
Issuers 5.50% Senior Notes due 2024 (the Additional Notes), and
the Guarantors agreed to provide the guarantees of the Additional
Notes. The Additional Notes were offered as additional notes to
TEPs existing $400 million aggregate principal amount of 5.50%
Senior Notes due 2024 that the Issuers issued in a private
placement that closed on September1, 2016 (the September 2016
Notes and, together with the Additional Notes, the Notes). The
Additional Notes were offered and sold in a transaction exempt
from the registration requirements under the Securities Act of
1933, as amended (the Securities Act). The Additional Notes are
expected to be sold by the Initial Purchasers to qualified
institutional buyers in reliance on Rule 144A under the
Securities Act.

Tallgrass Energy
GP, LP (TEGP) is the managing member of and therefore controls
Tallgrass Equity, LLC (Tallgrass Equity). Tallgrass Equity, in
turn, controls TEP through the direct ownership of 50% of
Tallgrass MLP GP, LLC (TEP GP), TEPs general partner. As a
result, under generally accepted accounting principles, TEGP
consolidates Tallgrass Equity, TEP GP, TEP, and TEPs
subsidiaries. TEGP has no operations outside of its indirect
ownership interests in TEP.

The Purchase
Agreement contains customary representations and warranties of
the parties and indemnification and contribution provisions under
which the Issuers and the Guarantors, on one hand, and the
Initial Purchasers, on the other, have agreed to indemnify each
other against certain liabilities, including liabilities under
the Securities Act, and customary conditions to closing,
obligations of the parties and termination provisions.

The Initial
Purchasers and certain of their affiliates are full service
financial institutions engaged in various activities, which may
include securities trading, commercial and investment banking,
financial advisory, investment management, investment research,
principal investment, hedging, financing and brokerage
activities. The Initial Purchasers and certain of their
affiliates have, from time to time, performed, and may in the
future perform, various commercial and investment banking and
financial advisory services for TEGP and its affiliates, for
which they received or may in the future receive customary fees
and expenses. In particular, affiliates of certain of the Initial
Purchasers are lenders under TEPs and Tallgrass Equitys revolving
credit facilities.

Indenture
and Notes

On September 1,
2016, the Issuers, the Guarantors named therein and U.S. Bank
National Association, as trustee, entered into an Indenture dated
as of September 1, 2016 (as supplemented, the Indenture),
governing the terms of the Notes. The Notes are general unsecured
senior obligations of the Issuers. The Notes are unconditionally
guaranteed jointly and severally on a senior unsecured basis by
the Guarantors and certain of TEPs future subsidiaries. The Notes
rank equal in right of payment with all existing and future
senior indebtedness of the Issuers, and senior in right of
payment to any future subordinated indebtedness of the
Issuers.

Interest and
Maturity

The Notes will
mature on September 15, 2024 and interest on the Notes is payable
in cash semi-annually in arrears on each March 15 and September
15, which commenced March15, 2017 for the September 2016 Notes
and will commence September15, 2017 for the Additional Notes.
Interest will be payable to holders of record on the March 1 and
September 1 immediately preceding the related interest payment
date, and will be computed on the basis of a 360-day year
consisting of twelve 30-day months.

Optional
Redemption

At any time prior
to September 15, 2019, the Issuers may on one or more occasions
redeem up to 35% of the aggregate principal amount of Notes
issued under the Indenture, upon not less than 30 or more than 60
days notice, at a redemption price of 105.50% of the principal
amount of the Notes redeemed, plus accrued and unpaid interest,
if any, to the redemption date (subject to the right of holders
of record on the relevant record date to receive interest due on
an interest payment date that is on or prior to the redemption
date), in an amount not greater than the net cash proceeds of one
or more equity offerings by TEP, provided that:

at least 65% of the aggregate principal amount of Notes
issued under the Indenture (excluding Notes held by TEP and
its subsidiaries) remains outstanding immediately after the
occurrence of such redemption; and

the redemption occurs within 180 days of the date of the
closing of each such equity offering.

Prior to September
15, 2019, the Issuers may on any one or more occasions redeem all
or part of the Notes, upon not less than 30 or more than 60days
notice, at a redemption price equal to the sum of:

the principal amount of the Notes redeemed, plus

the Make Whole Premium (as defined in the Indenture) at the
redemption date, plus

accrued and unpaid interest, if any, to the redemption date
(subject to the right of holders of record on the relevant
record date to receive interest due on an interest payment
date that is on or prior to the redemption date).

On and after
September 15, 2019, the Issuers may on any one or more occasions
redeem all or a part of the Notes, upon not less than 30 or more
than 60days notice, at the redemption prices (expressed as
percentages of principal amount) set forth below, plus accrued
and unpaid interest, if any, on the Notes redeemed to the
applicable redemption date (subject to the right of holders of
record on the relevant record date to receive interest due on an
interest payment date that is on or prior to the redemption
date), if redeemed during the twelve-month period beginning on
September 15 of the years indicated below:


YEAR	PERCENTAGE
		104.125	%
		102.750	%
		101.375	%
2022 and thereafter		100.000	%

The Issuers may
also redeem all (but not a portion of) the Notes under certain
circumstances if 90% or more of the aggregate principal amount of
the outstanding Notes are purchased in connection with a change
of control or alternate offer.

Change of
Control

If a Change of
Control Triggering Event (as defined in the Indenture) occurs,
each holder of Notes may require TEP to repurchase all or a
portion of that holders Notes for cash at a price equal to 101%
of the aggregate principal amount of the Notes repurchased, plus
any accrued but unpaid interest on the notes repurchased, to the
date of settlement (subject to the right of holders of record on
the relevant record date to receive interest due on an interest
payment date that is on or prior to the settlement date).

Certain
Covenants

The Indenture
contains covenants that, among other things and subject to
certain exceptions, limit TEPs ability and the ability of its
restricted subsidiaries to: (i) incur, assume or guarantee
additional indebtedness or issue disqualified stock; (ii) create
liens to secure indebtedness; (iii)pay distributions on equity
interests, repurchase equity securities or redeem subordinated
debt; (iv) make investments; (v) restrict distributions, loans or
other asset transfers from TEPs restricted subsidiaries; (vi)
consolidate with or merge with or into, or sell substantially all
of TEPs properties to, another person; (vii)sell or otherwise
dispose of assets, including equity interests in subsidiaries;
and (viii)enter into transactions with affiliates.

Events of
Default

Upon a continuing
event of default, the trustee or the holders of 25% of the
principal amount of the Notes may declare the Notes immediately
due and payable, except that a default resulting from certain
bankruptcy or insolvency related events with respect to TEP or
any restricted subsidiary of TEP that is a significant subsidiary
or any group of its restricted subsidiaries that, taken as a
whole, would constitute a significant subsidiary of TEP, will
automatically cause all Notes to become due and payable. Each of
the following constitutes an event of default under the
Indenture:

default for 30 days in the payment when due of interest on
the Notes;

default in payment when due of the principal of, or premium,
if any, on the Notes;

failure by TEP to comply with the covenant relating to
consolidations, mergers or transfers of all or substantially
all of TEPs assets or failure by TEP to purchase notes when
required to the asset sale or change of control provisions of
the Indenture;

failure by TEP for 180 days after notice to comply with its
reporting obligations under the Indenture;

failure by TEP for 60 days after notice to comply with any of
the other agreements in the Indenture;

default under any mortgage, indenture or instrument governing
any indebtedness for money borrowed or guaranteed by TEP or
any of its restricted subsidiaries, if such default: (i) is
caused by a failure to pay principal, interest or premium, if
any, on said indebtedness within any applicable grace period;
or (ii) results in the acceleration of such indebtedness
prior to its stated maturity, and, in each case, the
principal amount of the indebtedness, together with the
principal amount of any other such indebtedness under which
there has been a payment default or acceleration of maturity,
aggregates $75.0 million or more, subject to a cure
provision;

failure by TEP or any of its restricted subsidiaries to pay
final non-appealeable judgments aggregating in excess of
$75.0 million, which judgments are not paid, discharged or
stayed for a period of 60 days;

any guarantee is held in any judicial proceeding to be
unenforceable or invalid, or ceases for any reason to be in
full force and effect, or any Guarantor, or any person acting
on behalf of any Guarantor, denies or disaffirms its
obligations under its guarantee; and

certain events of bankruptcy or insolvency described in the
Indenture with respect to TEP, or any of TEPs restricted
subsidiaries that is a significant subsidiary or any group of
its restricted subsidiaries that, taken as a whole, would
constitute a significant subsidiary of TEP.

The foregoing
descriptions of the Indenture and Purchase Agreement do not
purport to be complete and are qualified in their entirety by
reference to the full text of the Indenture and the form of 5.50%
Senior Note, which are incorporated herein by reference to TEPs
Current Report on Form 8-K dated September 1, 2016, and to the
Purchase Agreement, which is filed with this Current Report on
Form 8-K as Exhibit 1.1 and is incorporated herein by
reference.

Item2.03.

Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.

The information
required by Item 2.03 relating to the Notes, the Indenture and
the Purchase Agreement is contained in Item 1.01 of this Current
Report on Form 8-K above and is incorporated herein by
reference.

Item9.01.

Financial Statements and Exhibits.

(d)

Exhibits.


EXHIBIT NUMBER		DESCRIPTION

1.1		Purchase Agreement, dated May11, 2017, among TEP, the Co-Issuer, the Guarantors named therein and Credit Suisse Securities (USA) LLC, as representative of the Initial Purchasers named therein (incorporated by reference to Exhibit 1.1 to Tallgrass Energy Partners, LPs Current Report on Form 8-K filed on May17, 2017).

4.1		Indenture, dated as of September 1, 2016, among Tallgrass Energy Partners, LP, Tallgrass Energy Finance Corp., the Guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Tallgrass Energy Partners, LPs Current Report on Form 8-K filed on September 1, 2016).

4.2		Form of 5.50% Senior Note (Included as Exhibit A in Exhibit 4.1).

About Tallgrass Energy GP, LP (NYSE:TEGP)
Tallgrass Energy GP, LP is a limited partnership company. The Company, through Tallgrass Energy Partners, LP (TEP), provides crude oil transportation to customers in Wyoming, Colorado, and the surrounding regions through Pony Express. Its business segments include Crude Oil Transportation & Logistics Segment, which is engaged in the ownership and operation of a crude oil pipeline system; Natural Gas Transportation & Logistics Segment, which is engaged in ownership and operation of FERC-regulated interstate natural gas pipelines and integrated natural gas storage facilities, and Processing & Logistics Segment, which is engaged in the ownership and operation of natural gas processing, treating and fractionation facilities, the provision of water business services primarily to the oil and gas exploration and production industry and the transportation of natural gas liquids (NGL). The Company, through TEP, owns and operates natural gas processing plants in Casper and Douglas. Tallgrass Energy GP, LP (NYSE:TEGP) Recent Trading Information
Tallgrass Energy GP, LP (NYSE:TEGP) closed its last trading session down -0.61 at 26.39 with 98,315 shares trading hands.