By Paul A. Harris
Portland, Ore., May 31 – Equitrans Midstream Corp. priced an upsized $1 billion of 7½% senior notes (Ba3/BB-/BB) in a Tuesday drive-by, according to market sources.
The deal, which was upsized from $800 million, featured an upsized $500 million tranche of five-year non-call two-year notes and an upsized $500 million tranche of eight-year bullet notes.
Both tranches were upsized from $400 million and priced at par to yield 7½%.
The yields printed in the middle of yield talk, covering both tranches, in the 7½% area. Initial guidance on both tranches was in the low 8% area.
The eight-year bullet saw the greater amount of investor demand, according to a sellside source, who said that the tranche was heard to be playing to $2 billion of orders at around 1:30 p.m. ET on Tuesday.
At that time, the five-year non-call two-year notes were playing to $1.5 billion of demand, the source added.
In spite of the three years difference in duration, both issues came with the same coupon, price and yield, with investors paying up for the additional call protection afforded by the eight-year bullet, the sellsider said.
Both broke higher in the secondary market with the eight-year bullet outperforming at 101¾ bid, while the five-year notes were par ¾ bid, 101½ offered, according to the sellside source.
BofA Securities Inc. was the left bookrunner. Joint bookrunners were J.P. Morgan Securities LLC, MUFG, Barclays, Citigroup Global Markets Inc., PNC Capital Markets LLC, Scotia Capital (USA) Inc., TD Securities (USA) LLC, Truist Securities Inc. and Wells Fargo Securities LLC.
The issuing entity is EQM Midstream Partners, LP, a wholly owned subsidiary of Equitrans Midstream.
The Pittsburgh-based company, which manages midstream assets in the Appalachian Basin, plans to use the proceeds to fund tender offers for any and all of its 4¾% senior notes due 2023, and portions of 6% senior notes due 2025 and its 4% notes 2024.
| Issuer: | EQM Midstream Partners, LP
|
| Amount: | $1 billion, increased from $800 million
|
| Issue: | Senior notes
|
| Left bookrunner: | BofA Securities Inc.
|
| Joint bookrunners: | J.P. Morgan Securities LLC, MUFG, Barclays, Citigroup Global Markets Inc., PNC Capital Markets LLC, Scotia Capital (USA) Inc., TD Securities (USA) LLC, Truist Securities Inc. and Wells Fargo Securities LLC
|
| Senior co-managers: | RBC Capital Markets LLC, SMBC Nikko Securities America Inc. and U.S. Bancorp Investments Inc.
|
| Co-manager: | First National
|
| Trade date: | May 31
|
| Settlement date: | June 7
|
| Ratings: | Moody's: Ba3
|
| S&P: BB-
|
| Fitch: BB
|
| Distribution: | Rule 144A and Regulation S for life
|
| Marketing: | Drive-by
|
|
|
| Five-year notes
|
| Amount: | $500 million, increased from $400 million
|
| Maturity: | June 1, 2027
|
| Coupon: | 7½%
|
| Price: | Par
|
| Yield: | 7½%
|
| Spread: | 469 bps
|
| First call: | June 1, 2024 at 103.75
|
| Price talk: | 7½% area
|
|
|
| Eight-year notes
|
| Amount: | $500 million, increased from $400 million
|
| Maturity: | June 1, 2030
|
| Coupon: | 7½%
|
| Price: | Par
|
| Yield: | 7½%
|
| Spread: | 467 bps
|
| Call protection: | Callable at par six months prior to maturity, otherwise non-callable
|
| Price talk: | 7½% area
|
|
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
