Deal size has doubled from original commitments due to added interest
By Susanna Moon
Chicago, March 16 – Targa Resources Corp. said it received definitive agreements for about $1 billion in a private placement of 9.5% series A convertible preferred stock, double the amount of commitments secured last month.
The additional preferreds sale is due to investor interest from funds managed by Blackstone Tactical Opportunities, Energy Capital Partners Mezzanine Opportunities Fund, investment companies affiliated with Tortoise Capital Advisors, LLC and other institutional investors, according to a company press release.
The preferred investors will acquire 965,100 newly authorized shares of 9.5% series A preferred stock at $1,030 per share.
The preferreds are callable after five years and can be converted into Targa common stock in 2028.
Investors also will receive 13,550,004 warrants with a strike price of $18.88 per common share and 6,533,727 warrants with a strike price of $25.11 per common share. The warrants have a seven-year term.
As previously announced, the strike prices are an 8.31% discount and 21.95% premium to the Feb. 17 closing price of $20.59.
Targa said on Feb. 18 that it received commitments from Stonepeak Infrastructure Partners to raise about $500 million from the private placement of 9.5% series A convertible preferred stock.
The investor agreed to buy 500,000 preferreds at a net price of $1,000 per preferred.
Stonepeak will receive seven-year warrants for a total of about 10,405,000 shares, with about 7.02 million of the warrants each exercisable at $18.88 and 3,385,000 of the warrants each exercisable at $25.11.
Proceeds will be used to repay debt and for general corporate purposes.
Targa Resources is a Houston-based midstream energy company.
| Issuer: | Targa Resources Corp.
|
| Issue: | Series A convertible preferred stock
|
| Amount: | $1 billion
|
| Preferreds: | 965,100
|
| Price: | $1,030
|
| Call option: | After five years
|
| Dividends: | 9.5%
|
| Warrants: | 20,083,731
|
| Warrant expiration: | Seven years
|
| Warrant strike price: | $18.88 (for 13,550,004 warrants), $25.11 (for 6,533,727 warrants)
|
| Investors: | Stonepeak Infrastructure Partners, funds managed by Blackstone Tactical Opportunities, Energy Capital Partners Mezzanine Opportunities Fund, investment companies affiliated with Tortoise Capital Advisors, LLC
|
| Announcement date: | Feb. 18
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| Upsized: | March 16
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| Settlement date: | March 16
|
| Stock symbol: | NYSE: TRGP
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| Stock price: | $20.59 at close Feb. 17
|
| Market capitalization: | $1.22 billion
|
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