Tallgrass Energy driving by with $700 million five-year notes; initial talk high-7% area

By Paul A. Harris

Portland, Ore., Jan. 16 – Tallgrass Energy Partners, LP and Tallgrass Energy Finance Corp. plan to price a $700 million offering of senior notes due 2029 (B1/BB-) in a Tuesday drive-by trailing a conference call with investors, according to market sources.

The deal is in the market with initial guidance in the high-7% area, a trader said.

The Rule 144A and Regulation S for life five-year notes become subject to an initial call in two years at par plus 50% of the coupon. They feature a 35% equity clawback at par plus the full coupon during the non-call period, and a 101% poison put.

BofA Securities, Inc. is the left bookrunner. Citigroup Global Markets Inc., TD Securities (USA) LLC, Barclays, Citizens Capital Markets Inc., J.P. Morgan Securities LLC, PNC Capital Markets LLC, Regions Securities Inc., Santander Investment Securities Inc. and SMBC Nikko Securities America Inc. are the joint bookrunners.

Blackstone and Zions are the co-managers.

The energy infrastructure company, headquartered in Leawood, Kan., plans to use the proceeds to fund a tender offer for its 2025 notes and to pay down its revolver.

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