Energy Transfer Equity, L.P. (NYSE: ETE) yesterday
completed the final steps of its previously announced refinancing
transactions, which the Partnership expects will reduce its current
annual interest expense by over $16 million. The reduced interest
expense is expected to increase ETE’s distributable cash flow per unit
by approximately $0.06 on an annualized basis.
These related transactions allow ETE to continue to balance its mix of
floating and fixed rate debt and retain flexible prepayable debt in its
capital structure.
As previously announced, ETE closed on the tender offer (the “Tender
Offer”) to purchase for cash a portion of its outstanding $1.8 billion
of 7.500% Senior Notes due 2020 (the “2020 Notes”). The total aggregate
principal amount of 2020 Notes validly tendered and not validly
withdrawn was approximately $613 million, representing approximately 34%
of the outstanding 2020 Notes. The remaining balance of the 2020 Notes
is now $1.187 billion.
ETE also completed a public offering of $450 million in aggregate
principal amount of 5.875% Senior Notes due 2024 (the “Notes Offering”)
and refinanced its existing $900 million term loan and $200 million
revolving credit facilities.
ETE used the net proceeds from the Notes Offering, together with a
portion of the borrowings under its new $1.0 billion term loan credit
facility and new $600 million revolving credit facility, to fund the
aggregate consideration for the Tender Offer.
The refinancing of the term loan facility extended the maturity from
March 2017 to December 2019, and reduced the interest rate on borrowings
by 0.50% per year.
The refinancing of the revolving credit facility extended the maturity
from September 2015 to December 2018, with an option for the Partnership
to extend the term, subject to certain terms and conditions, until
December 2020. The new revolving credit facility also contains an
accordion feature that allows ETE to increase the size of the facility
to $1.0 billion.
With the completion of these refinancing transactions, ETE has achieved
multiple goals of extending out its current maturities, materially
reducing the size of the maturity tower in December 2020 and reducing
its overall actual interest expense.
Energy Transfer Equity, L.P. (NYSE:ETE) is a master limited
partnership which owns the general partner and 100% of the incentive
distribution rights (IDRs) of Energy Transfer Partners, L.P. (NYSE:
ETP), approximately 49.6 million ETP common units, and approximately
50.2 million ETP Class H Units, which track 50% of the underlying
economics of the general partner interest and IDRs of Sunoco Logistics
Partners L.P. (NYSE: SXL). ETE also owns the general partner and 100% of
the IDRs of Regency Energy Partners LP (NYSE: RGP) and approximately
26.3 million RGP common units. The Energy Transfer family of companies
owns more than 56,000 miles of natural gas, natural gas liquids, refined
products, and crude oil pipelines.
Statements about the offering may be forward-looking statements as
defined under federal law. 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 ETE, and a variety of risks that could cause results to
differ materially from those expected by management of ETE. ETE
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.
Copyright Business Wire 2013