Targa Resources Partners LP Announces $750.0 Million Offering of Senior Notes

Rhea-AI Summary

Targa Resources Partners LP plans to offer $750 million in senior unsecured notes due 2032 to qualified institutional buyers under Rule 144A and Regulation S. Proceeds will fund a cash tender offer for its 5 1/8% Senior Notes due 2025 and reduce borrowings under credit facilities. The offering is not contingent on the Tender Offer, which is subject to certain conditions. The notes will be eligible for trading by qualified institutional buyers and non-U.S. persons. The offering emphasizes Targa's strategy to optimize its debt structure.

Positive

• Plans to use proceeds from the offering to fund a cash tender offer for existing debt, potentially lowering interest expenses.
• Offering aims to reduce borrowings under credit facilities, strengthening financial position.

Negative

• Issuing new senior unsecured notes may lead to shareholder dilution.
• Market conditions remain uncertain, which could affect the success of the offering.

HOUSTON, Jan. 19, 2021 (GLOBE NEWSWIRE) -- Targa Resources Partners LP (the “Partnership”), a subsidiary of Targa Resources Corp. (NYSE: TRGP), and the Partnership’s subsidiary Targa Resources Partners Finance Corporation announced today that, subject to market conditions, they intend to sell in an offering in the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to persons outside of the United States pursuant to Regulation S under the Securities Act, $750.0 million in aggregate principal amount of senior unsecured notes due 2032. The Partnership intends to use a portion of the net proceeds from the offering to fund the concurrent cash tender offer (the “Tender Offer”) to purchase for cash, subject to certain conditions, any and all of the Partnership’s 5 1/8% Senior Notes due 2025 (the “2025 Notes”), to pay fees, expenses and premiums thereof, and to redeem any 2025 Notes that remain outstanding after consummation of the Tender Offer. The Partnership will use the remaining net proceeds from the offering to reduce borrowings under the credit facilities of the Partnership and Targa Resources Corp. The offering is not conditioned on the consummation of the Tender Offer. The Tender Offer is conditioned on, among other things, the offering.

The securities to be offered have not been registered under the Securities Act, or any state securities laws, and unless so registered, the securities may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The senior unsecured notes are expected to be eligible for trading by qualified institutional buyers under Rule 144A under the Securities Act and by non-U.S. persons pursuant to Regulation S under the Securities Act. This announcement shall not constitute an offer to sell or a solicitation of an offer to buy any of these securities, except as required by law.

About Targa Resources Partners LP

Targa Resources Partners LP is a Delaware limited partnership formed in October 2006 by its parent, Targa Resources Corp. (“TRC” or the “Company”), to own, operate, acquire and develop a diversified portfolio of complementary midstream infrastructure assets. On February 17, 2016, TRC completed the acquisition of all outstanding common units of the Partnership. Targa Resources Corp. is a leading provider of midstream services and is one of the largest independent midstream infrastructure companies in North America. The Company owns, operates, acquires and develops a diversified portfolio of complementary midstream infrastructure assets. The Company is primarily engaged in the business of: gathering, compressing, treating, processing, transporting and purchasing and selling natural gas; transporting, storing, fractionating, treating and purchasing and selling NGLs and NGL products, including services to LPG exporters; and gathering, storing, terminaling and purchasing and selling crude oil.

The principal executive offices of Targa Resources Partners LP are located at 811 Louisiana, Suite 2100, Houston, TX 77002 and their telephone number is 713-584-1000.

Forward-Looking Statements

Certain statements in this release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this release that address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties, factors and risks, many of which are outside the Partnership’s control, which could cause results to differ materially from those expected by management of the Partnership. Such risks and uncertainties include, but are not limited to, weather, political, economic and market conditions, including a decline in the price and market demand for natural gas, natural gas liquids and crude oil, the impact of pandemics such as COVID-19, actions by the Organization of the Petroleum Exporting Countries (“OPEC”) and non-OPEC oil producing countries, the timing and success of business development efforts; and other uncertainties. These and other applicable uncertainties, factors and risks are described more fully in the Partnership’s filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The Partnership does not undertake an obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Contact the Company's investor relations department by email at InvestorRelations@targaresources.com or by phone at (713) 584-1133.

Sanjay Lad
Vice President, Finance & Investor Relations

Jennifer Kneale
Chief Financial Officer

FAQ

What is Targa Resources Partners LP planning in January 2021?

Targa Resources Partners LP plans to offer $750 million in senior unsecured notes due 2032.

How will Targa Resources use the proceeds from the $750 million offering?

The proceeds will fund a cash tender offer for its 5 1/8% Senior Notes due 2025 and reduce overall borrowings.

What are the conditions related to Targa's cash tender offer?

The cash tender offer is subject to certain conditions but is not contingent on the successful completion of the bond offering.

What is the significance of the notes being offered under Rule 144A and Regulation S?

This allows the notes to be sold to qualified institutional buyers in the U.S. and to persons outside the U.S., enhancing market accessibility.