DTE Energy Announces Launch of DT Midstream’s New Senior Secured Credit Facilities

Rhea-AI Summary

DTE Energy announced the planned spin-off of its non-utility natural gas pipeline, storage, and gathering business into a new independent entity, DT Midstream. DT Midstream has initiated syndication of a new senior secured credit facility with a total capacity of up to $1.75 billion, comprising a $1 billion term loan and a $750 million revolving credit facility. Proceeds will repay intercompany obligations and pay a dividend to DTE Energy. The spin-off is subject to approval by DTE Energy's Board and regulatory bodies, expected to be tax-free for shareholders.

Positive

• DT Midstream's new credit facility offers a robust financing structure with up to $1.75 billion available.
• The spin-off promises a tax-free distribution for DTE Energy shareholders.

Negative

• Completion of the spin-off is subject to numerous approvals, creating uncertainty.
• Market conditions may affect DT Midstream's ability to secure the credit facility on favorable terms.

Detroit, May 17, 2021 (GLOBE NEWSWIRE) -- DETROIT — May 17, 2021 — DTE Energy (“DTE Energy”) (NYSE: DTE) today announced that DT Midstream, Inc. (“DT Midstream”), the new independent, publicly traded company that is expected to be formed through the planned spin-off of DTE Energy’s non-utility natural gas pipeline, storage and gathering business, has launched the syndication of a new senior secured credit facility that will provide for up to $1 billion of term loans pursuant to a 7-year term loan facility and up to $750 million of commitments under a 5-year revolving credit facility.

DT Midstream intends to use the net proceeds from the new term loan facility for the repayment of intercompany obligations due to DTE Energy and the payment of a dividend to DTE Energy.

Barclays Bank PLC is acting as joint lead arranger, joint lead bookrunner and administrative agent of the new senior secured credit facility.

DT Midstream has filed the Form 10 registration statement with the Securities and Exchange Commission in connection with the planned spin-off.  Completion of the spin-off is subject to final approval by DTE Energy’s Board of Directors, the Form 10 registration statement being declared effective by the Securities and Exchange Commission, regulatory approvals and satisfaction of other conditions.  Under the separation plan, DTE Energy shareholders will retain their shares of DTE Energy stock and receive a pro-rata dividend of shares of DT Midstream stock.  The separation transaction is expected to be tax-free to DTE Energy and its shareholders for U.S. federal income tax purposes. 

Forward looking statements

The information contained herein is as of the date of this release.  DTE Energy expressly disclaims any current intention to update any forward-looking statements contained in this release as a result of new information or future events or developments.  Words such as “anticipate,” “believe,” “expect,” “may,” “could,” “projected,” “aspiration,” “plans” and “goals” signify forward-looking statements.

Forward-looking statements are not guarantees of future results and conditions but rather are subject to various assumptions, risks and uncertainties.  This release contains forward-looking statements about DT Midstream’s intention to enter into the new senior secured credit facility, DT Midstream’s intended use of proceeds and the anticipated terms of the new senior secured credit facility.  DT Midstream may not be able to enter into the new senior secured credit facility on the anticipated terms or at all. DT Midstream’s ability to enter into the new senior secured credit facility will depend, among other things, on market conditions for debt securities in general and DT Midstream’s debt securities in particular. This release also contains forward-looking statements about DTE Energy’s intent to spin-off DT Midstream and DTE Energy’s preliminary strategic, operational and financial considerations related thereto. The statements with respect to the separation transaction are preliminary in nature and subject to change as additional information becomes available. The separation transaction will be subject to the satisfaction of a number of conditions, including the final approval of DTE Energy’s Board of Directors, and there is no assurance that such separation transaction will in fact occur. Many factors impact forward-looking statements including, but not limited to, the following: changes in general economic conditions; competitive conditions in our industry; actions taken by third-party operators, processors, transporters and gatherers; changes in expected production from Indigo Natural Resources, LLC and/or its affiliates, Southwestern Energy Company and/or its affiliates, Antero Resources Corporation and/or its affiliates and other third parties in our areas of operation; demand for natural gas gathering, transmission, storage, transportation and water services; the availability and price of natural gas to the consumer compared to the price of alternative and competing fuels; competition from the same and alternative energy sources; our ability to successfully implement our business plan; our ability to complete organic growth projects on time and on budget; our ability to complete acquisitions; the price and availability of debt and equity financing; restrictions in our existing and any future credit facilities; energy efficiency and technology trends; operating hazards and other risks incidental to gathering, storing and transporting natural gas; natural disasters, adverse weather conditions, casualty losses and other matters beyond our control; interest rates; labor relations; large customer defaults; changes in the availability and cost of capital; changes in tax status; the effects of existing and future laws and governmental regulations; changes in insurance markets impacting costs and the level and types of coverage available; the timing and extent of changes in commodity prices; the suspension, reduction or termination of our customers’ obligations under our commercial agreements; disruptions due to equipment interruption or failure at our facilities, or third-party facilities on which our business is dependent; the effects of future litigation; the qualification of the spin-off as a tax-free distribution; our ability to achieve the benefits that we expect to achieve as an independent publicly traded company; and our dependence on DTE Energy to provide us with certain services following the spin-off. New factors emerge from time to time. We cannot predict what factors may arise or how such factors may cause results to differ materially from those contained in any forward-looking statement. Any forward-looking statements speak only as of the date on which such statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.

 

For further information, members of the media may call:

Pete Ternes, DTE Energy, 313.235.5555

FAQ

What is the planned spin-off of DTE Energy and DT Midstream?

DTE Energy plans to spin off its non-utility natural gas business into DT Midstream, an independent publicly traded company.

How much will DT Midstream's new credit facility provide?

DT Midstream's new credit facility will provide up to $1.75 billion, including $1 billion in term loans and $750 million in revolving credit.

What will DT Midstream use the net proceeds from the credit facility for?

The proceeds will be used to repay intercompany obligations to DTE Energy and to pay a dividend to DTE Energy.

Is the spin-off of DT Midstream expected to be tax-free?

Yes, the spin-off is expected to be tax-free for DTE Energy shareholders for U.S. federal income tax purposes.

When is the spin-off of DT Midstream expected to be completed?

The spin-off's completion is pending final approval from DTE Energy's Board and regulatory approvals.