Targa Resources Partners LP Prices Upsized $1.0 Billion Offering of Senior Notes

Rhea-AI Summary

Targa Resources Partners LP announced an upsized offering of $1.0 billion in senior unsecured notes due 2032, accruing interest at 4% per annum. The offering is set to close on February 2, 2021. Proceeds will be used for a cash tender offer for its 5 1/8% Senior Notes due 2025, plus associated fees and to reduce borrowings under existing credit facilities. The offering is not contingent on the tender offer's completion. The securities are not registered under the Securities Act and may only be offered in compliance with relevant exemptions.

Positive

• Upsized offering of $1.0 billion indicates strong market demand.
• Interest rate set at 4% per annum is competitive.
• Net proceeds aimed to reduce debt enhance financial stability.

Negative

• Dilution risk for existing shareholders due to new debt issuance.
• Dependence on the tender offer's success may create uncertainty.

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 the pricing of an upsized offering of $1.0 billion in aggregate principal amount of senior unsecured notes due 2032 (the “2032 Notes”). The 2032 Notes will accrue interest at a rate of 4% per annum, will mature on January 15, 2032, and were priced at par.

The offering is expected to close on February 2, 2021, subject to customary closing conditions. The Partnership intends to use a portion of the net proceeds from the offering to fund the previously announced concurrent cash tender offer (the “Tender Offer”) 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 offered have not been registered under the Securities Act of 1933, as amended (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 pursuant to 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 are the details of Targa Resources Partners LP's 2032 notes offering?

Targa Resources Partners LP is offering $1.0 billion in senior unsecured notes due 2032 at a 4% interest rate, set to close on February 2, 2021.

How will Targa Resources use the proceeds from the 2032 notes offering?

The proceeds will fund a tender offer for 2025 Notes and reduce borrowings under existing credit facilities.

What are the risks associated with Targa Resources Partners LP's new offering?

There is a dilution risk for existing shareholders and uncertainty linked to the tender offer's successful completion.