NGL Energy Partners LP Announces Pricing of $2.05 Billion Offering of Senior Secured Notes

Rhea-AI Summary

NGL Energy Partners LP (NYSE: NGL) has priced a private offering of $2.05 billion in senior secured notes due 2026. The offering is exempt from registration under the Securities Act. Proceeds will be used to repay debt from existing credit facilities and cover associated fees. The notes will carry an interest rate of 7.500% per annum, with payments starting August 1, 2021. The offering is geared towards qualified institutional buyers, with an expected closing date of February 4, 2021. NGL emphasizes that this press release does not constitute an offer to sell securities.

Positive

• Successful pricing of $2.05 billion in senior secured notes indicates strong market interest.
• Expected proceeds will significantly reduce outstanding debt, enhancing financial stability.
• Interest rate of 7.500% may be attractive in the current market context.

Negative

• Significant reliance on debt financing may raise concerns about future financial leverage.
• Forward-looking statements highlight risks and uncertainties that could impact operations.
• Offering is subject to market conditions and regulatory risks related to unregistered securities.

NGL Energy Partners LP (NYSE: NGL) (“NGL”), through its wholly owned subsidiaries NGL Energy Operating LLC and NGL Energy Finance Corp., today announced that they have priced a private offering of $2.05 billion in aggregate principal amount of senior secured notes due 2026 (the “Notes”) that is exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). NGL expects to use the net proceeds of the offering, together with borrowings under a new $500.0 million asset-based revolving credit facility, to (i) repay all outstanding borrowings under and terminate NGL’s existing revolving credit facility, (ii) repay all outstanding borrowings under and terminate NGL’s $250.0 million term credit agreement and (iii) to pay fees and expenses in connection therewith. NGL expects the offering to close on February 4, 2021, subject to the satisfaction of customary closing conditions.

The Notes are being initially sold to investors at a price of 100% of their principal amount. Interest on the notes will accrue at a rate of 7.500% per annum and will be payable semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2021. The maturity date of the notes is February 1, 2026.

The Notes have been offered and sold only to persons reasonably believed to be qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act, and to persons, other than U.S. persons, outside of the United States pursuant to Regulation S under the Securities Act.

The offer and sale of the Notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. This press release shall not constitute an offer to sell or a solicitation of an offer to purchase the notes or any other securities, and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.

Forward-Looking Statements

This press release includes “forward-looking statements.” All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. While NGL believes such forward-looking statements are reasonable, NGL cannot assure they will prove to be correct. The forward-looking statements involve risks and uncertainties that affect operations, financial performance, and other factors as discussed in filings with the Securities and Exchange Commission. Other factors that could impact any forward-looking statements are those risks described in NGL’s annual report on Form 10-K, quarterly reports on Form 10-Q, and other public filings. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading “Risk Factors.” NGL undertakes no obligation to publicly update or revise any forward-looking statements except as required by law.

About NGL Energy Partners LP

NGL Energy Partners LP, a Delaware limited partnership, is a diversified midstream energy company that transports, stores, markets and provides other logistics services for crude oil, natural gas liquids and other products and transports, treats and disposes of produced water generated as part of the oil and natural gas production process.

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FAQ

What is the total amount of the senior secured notes offered by NGL Energy Partners LP?

NGL Energy Partners LP has priced a private offering of $2.05 billion in senior secured notes.

When will the interest on the senior secured notes be paid?

Interest on the notes will be payable semiannually on February 1 and August 1, starting August 1, 2021.

What is the maturity date for NGL's senior secured notes?

The maturity date for the senior secured notes is February 1, 2026.

How will NGL use the proceeds from the senior secured notes?

The proceeds will be used to repay outstanding borrowings under existing credit facilities and to pay related fees and expenses.

Who can buy the senior secured notes offered by NGL?

The notes are offered only to qualified institutional buyers in the U.S. and certain non-U.S. persons.