Energy Transfer LP Announces Pricing of $3.0 Billion of Senior Notes

Rhea-AI Summary

Energy Transfer LP (NYSE: ET) has announced the pricing of $3.0 billion in senior notes, consisting of: $650 million of 5.200% notes due 2030, $1.250 billion of 5.700% notes due 2035, and $1.100 billion of 6.200% notes due 2055. The notes are priced at 99.796%, 99.872%, and 99.398% of face value, respectively.

The sale is expected to settle on March 4, 2025, generating net proceeds of approximately $2.97 billion. The company plans to use the proceeds to refinance existing debt, including repaying commercial paper and revolving credit facility borrowings. The offering is being managed by BofA Securities, Citigroup, Deutsche Bank Securities, Mizuho, and SMBC Nikko.

Energy Transfer operates one of America's largest energy asset portfolios, with over 130,000 miles of pipeline across 44 states. The company maintains significant ownership in Sunoco LP (21%) and USA Compression Partners, LP (39%).

Positive

• Successful $3.0 billion debt offering indicates strong market confidence
• Debt refinancing could potentially reduce interest expenses
• Extensive infrastructure network spanning 44 states provides stable revenue base
• Significant ownership stakes in Sunoco LP (21%) and USA Compression Partners (39%) diversify income streams

Negative

• Taking on $3.0 billion in new debt, though for refinancing
• Higher interest rates on new notes ranging from 5.200% to 6.200%

Insights

Fixed Income Analyst

Energy Transfer's $3.0 billion senior notes offering represents a strategic debt restructuring that merits careful analysis. The three-tranche structure ($650M at 5.200% due 2030, $1.25B at 5.700% due 2035, and $1.1B at 6.200% due 2055) demonstrates sophisticated liability management, with maturities spread across different time horizons to minimize refinancing risk.

The pricing structure reveals important market dynamics. The modest discount to par value (ranging from 0.204% to 0.602%) indicates strong investor confidence in ET's credit profile. The step-up in yields between tranches (0.5% between 2030 and 2035, 0.5% between 2035 and 2055) reflects a relatively flat credit curve, suggesting investors view ET's long-term prospects favorably.

The refinancing of commercial paper and revolving credit facilities with longer-term fixed-rate debt is particularly strategic in the current market environment. This move locks in rates for extended periods, reducing exposure to short-term interest rate fluctuations. The transaction enhances ET's debt maturity profile and provides greater financial flexibility by freeing up revolving credit capacity for future operational needs.

The timing of this offering is noteworthy given ET's extensive infrastructure portfolio (130,000+ miles of pipeline) and ongoing capital requirements. By securing long-term financing now, ET strengthens its position to pursue strategic growth initiatives while maintaining a sustainable capital structure. The successful placement of such a substantial offering, particularly the 30-year tranche, demonstrates the market's confidence in ET's business model and long-term viability in the energy infrastructure sector.

DALLAS--(BUSINESS WIRE)-- Energy Transfer LP (NYSE: ET) today announced the pricing of its offering of $650 million aggregate principal amount of 5.200% senior notes due 2030, $1.250 billion aggregate principal amount of 5.700% senior notes due 2035 and $1.100 billion aggregate principal amount of 6.200% senior notes due 2055 (together, the “senior notes”) at prices to the public of 99.796%, 99.872% and 99.398%, respectively, of their face value.

The sale of the senior notes is expected to settle on March 4, 2025, subject to the satisfaction of customary closing conditions. Energy Transfer intends to use the net proceeds of approximately $2.97 billion (before offering expenses) to refinance existing indebtedness, including to repay commercial paper and borrowings under its revolving credit facility, and for general partnership purposes.

BofA Securities, Citigroup, Deutsche Bank Securities, Mizuho and SMBC Nikko are acting as joint book-running managers for the senior notes offering.

The offering of the senior notes is being made pursuant to an effective shelf registration statement and prospectus filed by Energy Transfer with the Securities and Exchange Commission (“SEC”). The offering of the senior notes may be made only by means of a prospectus and related prospectus supplement meeting the requirements of Section 10 of the Securities Act of 1933, as amended, copies of which may be obtained from the following addresses:

BofA Securities, Inc. 201 North Tryon Street NC1-022-02-25 Charlotte, NC 28255-0001 Attention: Prospectus Department Toll-free: 1-800-294-1322 E-mail: dg.prospectus_requests@bofa.com     Citigroup Global Markets Inc. c/o Broadridge Financial Solutions 1155 Long Island Avenue Edgewood, New York 11717 Toll-free: 1-800-831-9146 E-mail: prospectus@citi.com     Deutsche Bank Securities Inc. Attention: Prospectus Group 1 Columbus Circle New York, NY 10019 Toll-free: 1-800-503-4611 E-mail: Prospectus.Ops@db.com

Mizuho Securities USA LLC 1271 Avenue of the Americas New York, NY 10020 Attention: Debt Capital Markets Toll-free: 1-866-271-7403     SMBC Nikko Securities America, Inc. 277 Park Avenue New York, NY 10172 Attention: Debt Capital Markets Toll-free: 1-888-868-6856 E-mail: prospectus@smbcnikko-si.com

You may also obtain these documents for free when they are available by visiting EDGAR on the SEC website at www.sec.gov.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Energy Transfer LP owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with more than 130,000 miles of pipeline and associated energy infrastructure. Energy Transfer’s strategic network spans 44 states with assets in all of the major U.S. production basins. Energy Transfer is a publicly traded limited partnership with core operations that include complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (“NGL”) and refined product transportation and terminalling assets; and NGL fractionation. Energy Transfer also owns Lake Charles LNG Company, as well as the general partner interests, the incentive distribution rights and approximately 21% of the outstanding common units of Sunoco LP (NYSE: SUN), and the general partner interests and approximately 39% of the outstanding common units of USA Compression Partners, LP (NYSE: USAC).

Forward-Looking Statements

Statements about the offering may be forward-looking statements. Forward-looking statements can be identified by words such as “anticipates,” “believes,” “intends,” “projects,” “plans,” “expects,” “continues,” “estimates,” “goals,” “forecasts,” “may,” “will” and other similar expressions. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors, many of which are outside the control of Energy Transfer, and a variety of risks that could cause results to differ materially from those expected by management of Energy Transfer. Important information about issues that could cause actual results to differ materially from those expected by management of Energy Transfer can be found in Energy Transfer’s public periodic filings with the SEC, including its Annual Report on Form 10-K. Energy Transfer undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250218782113/en/

Investor Relations:

Bill Baerg, Brent Ratliff, Lyndsay Hannah, 214-981-0795

Media Relations:

Media@energytransfer.com

214-840-5820

Source: Energy Transfer LP

FAQ

What is the total value of Energy Transfer's (ET) new senior notes offering?

Energy Transfer's senior notes offering totals $3.0 billion, consisting of three tranches with different maturities and interest rates.

What are the interest rates for ET's new senior notes?

The senior notes have three different interest rates: 5.200% for notes due 2030, 5.700% for notes due 2035, and 6.200% for notes due 2055.

How will Energy Transfer (ET) use the proceeds from the senior notes?

Energy Transfer will use the net proceeds of approximately $2.97 billion to refinance existing debt, including repaying commercial paper and borrowings under its revolving credit facility, and for general partnership purposes.

When will ET's senior notes offering settle?

The senior notes offering is expected to settle on March 4, 2025, subject to customary closing conditions.

How extensive is Energy Transfer's (ET) pipeline network?

Energy Transfer operates more than 130,000 miles of pipeline and associated energy infrastructure across 44 U.S. states.