By Wendy Van Sickle
Columbus, Ohio, June 26 – NuStar Energy LP agreed to sell $590 million of new series D cumulative convertible preferred units representing limited partner interests in the partnership in a private placement to investment funds managed or sub-advised by EIG Management Co., LLC and FS/EIG Advisor, LLC, the adviser to FS Energy & Power Fund.
The purchasers will acquire 23,246,650 preferred units at $25.38 apiece, according to a press release.
At the initial closing slated for June 29, the buyers will purchase $400 million of preferred units.
The purchasers agreed to purchase the balance of the preferred units at a second closing, set for July 13.
The preferred units pay annualized distributions of 9.75% for the first two years, 10.75% for years three through five and the greater of 13.75% or the common unit distribution rate thereafter.
They are convertible into common units representing limited partner interests in the partnership on a one-for-one basis at the purchasers’ option after two years.
The preferred units are callable after five years, and the purchasers can cause the partnership to redeem the preferred units after 10 years.
The preferred units will rank pari passu with the Partnership’s outstanding series A, series B and series C preferred units and senior to the partnership’s common units, with respect to distribution rights and upon liquidation.
NuStar is a San Antonio-based limited partnership and independent liquids terminal and pipeline operator.
| Issuer: | NuStar Energy LP
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| Amount: | $590 million, or 23,246,650 units
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| Description: | Cumulative convertible preferred units
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| Maturity: | Perpetual
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| Distribution: | 9.75% for first two years, 10.75% in years three through five, greater of 13.75% or common unit distribution rate thereafter
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| Price: | $25.38 per unit
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| Call option: | After five years
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| Put option: | After 10 years
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| Settlement date: | June 29 for $400 million, July 13 for $190 million
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| Stock symbol: | NYSE: NS
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| Stock price: | $24.53 at the market close June 26
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| Market capitalization: | $2.29 billion
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| Distribution: | Private placement
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