By Angela McDaniels
Tacoma, Wash., Oct. 7 – Targa Resources Partners LP priced $110 million of series A fixed-to-floating-rate cumulative redeemable perpetual preferred units (Ba3/B+), according to a company news release.
The company had planned to sell at least $75 million of the preferreds.
The deal has a $16.5 million greenshoe.
The initial dividend rate is 9%. After five years, the rate will become one-month Libor plus 771 basis points. When declared, distributions will be payable monthly.
Price talk for the initial rate was 9% to 9.125%, according to a market source.
The 4.4 million units were sold for $25.00 each.
Morgan Stanley & Co. LLC, BofA Merrill Lynch, UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunners.
The units become redeemable after five years.
Proceeds will be used to reduce borrowings outstanding under a senior secured credit facility and for general partnership purposes. That may include paying down other debt, redeeming or repurchasing outstanding notes, working capital and funding for capital expenditures and acquisitions.
The company intends to list the new units on the New York Stock Exchange under the ticker symbol “NGLSPA.”
Houston-based Targa Resources Partners provides midstream natural gas and natural gas liquids services.
| Issuer: | Targa Resources Partners LP
|
| Issue: | Series A fixed-to-floating-rate cumulative redeemable perpetual preferred units
|
| Amount: | $110 million, or 4.4 million units
|
| Greenshoe: | $16.5 million, or 660,000 units
|
| Maturity: | Perpetual
|
| Bookrunners: | Morgan Stanley & Co. LLC, BofA Merrill Lynch, UBS Securities LLC, Wells Fargo Securities LLC
|
| Co-managers: | RBC Capital Markets, LLC, FBR Capital Markets & Co.
|
| Dividend: | Initially 9%; beginning Nov. 1, 2020, one-month Libor plus 771 bps
|
| Price: | $25.00
|
| Call option: | After five years
|
| Pricing date: | Oct. 7
|
| Settlement date: | Oct. 15
|
| Ratings: | Moody’s: Ba3
|
| Standard & Poor’s: B+
|
| Listing: | NYSE: NGLSPA
|
| Price talk: | 9% to 9.125% initial rate
|
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