NGL Energy Partners LP announced that it has closed a new seven-year $950 million senior secured term loan facility through its subsidiaries NGL Energy Operating LLC and NGL Energy Finance Corp. The financing is part of a broader effort to simplify the company’s capital structure and repurchase a portion of its preferred equity.
According to the company, the net proceeds from the term loan will be used to repay all borrowings under NGL’s existing term loan credit agreement, redeem or repurchase a portion of its Class D Preferred Units, and support general corporate purposes.
The final size of the facility reflects an additional $250 million of secured debt financing, increasing the total term loan amount to $950 million from the prior $687.8 million.
As part of the transaction, the company expects to repurchase approximately 195,000 Class D Preferred Units using proceeds from the incremental financing and additional funds from its asset-based lending facility. After the repurchase, about 316,000 Class D units are expected to remain outstanding.
In connection with the new term loan, NGL also amended its senior secured asset-based revolving credit facility. The amendment reduces the total commitments under the facility from $475 million to $425 million and includes other changes to the terms of the agreement.
NGL Energy Partners is a diversified midstream energy company that transports, stores, and markets crude oil and natural gas liquids, while also providing logistics services and produced water handling for oil and gas production operations.
KEY QUOTE:
“The successful execution of the incremental secured debt financing represents a meaningful step toward a simpler and more flexible capital structure. The incremental $250 million in proceeds combined with additional funds from the ABL will enable NGL to repurchase approximately 195,000 Class D Units. Subsequent to this transaction, there will be approximately 316,000 Class D Units remaining.”
Mike Krimbill, CEO Of NGL Energy Partners LP
