NGPL PipeCo LLC's Consent Solicitation Announcement
NGPL PipeCo LLC, a Delaware limited liability company, has informed investors that it has started consent solicitations for its 4.875% Senior Notes maturing in 2027 and 3.250% Senior Notes due in 2031. This move is aimed at obtaining necessary amendments to the Indentures that govern these notes.
Details of the Consent Solicitations
The consent solicitations pertain to certain amendments related to both the 2027 and 2031 Notes. This initiative comes in connection with a significant transaction whereby Brookfield Infrastructure US Holdings I has agreed to sell a 25% stake in NGPL Holdings LLC, the indirect parent of NGPL PipeCo, to ArcLight Capital Partners, LLC. If completed, this transaction will result in ArcLight funds and Kinder Morgan, Inc. (NYSE: KMI) sharing governance rights in NGPL Holdings.
Implications of the Transaction
The anticipated completion of this transaction may trigger a 'Change of Control' as defined in the relevant Indentures. This could lead to a 'Change of Control Triggering Event' if the ratings of the notes fall based on the assessment by any two of the three recognized Rating Agencies.
Proposed Amendments to the Indentures
The proposed amendments aim to clarify that the upcoming transaction does not equate to a Change of Control under the Indentures. These amendments entail that consent must be given in full for the proposed changes affecting a particular series of notes.
Eligibility and Consent Fee
To garner the consent, holders of the notes must participate by a specified deadline to qualify for a consent fee of $1.00 per $1,000 in principal amount. The deadline for valid consent is set for 5:00 p.m. on a notable date, but this can be adjusted as the company sees fit.
Understanding the importance of shareholder input, the company requires a majority approval from holders of these notes to finalize the proposed amendments effectively.
Operational Aspects and Responsibilities
Once the amendments take effect, all current holders will be considered bound by these changes, reinforcing the cooperative foundation underlying shareholder interests and company governance. It is important to recognize that a holder may choose to consent to one series while opting out for another.
Role of ArcLight in the Consent Process
Following the completion of the transaction, ArcLight plans to distribute the consent fees to eligible holders who affirmatively consent and do not retract their agreement prior to the deadline. Such disbursements are contingent upon the satisfaction of specific conditions outlined in the consent solicitation statement.
Potential Contingencies
If the required consents are not obtained, NGPL PipeCo may decide to terminate the solicitation pertaining to that specific series of notes. In such an event, the company may initiate a Change of Control Offer in accordance with the terms detailed in the Indentures should it trigger a Change of Control.
Conclusion
This announcement serves purely informational purposes regarding consent solicitations, and does not represent an invitation to purchase or sell securities. Each solicitation is being performed following the outlined procedures consistent with regulatory requirements.
Frequently Asked Questions
What is the purpose of the consent solicitations by NGPL PipeCo?
The consent solicitations aim to secure necessary amendments to the Indentures governing the 2027 and 2031 Senior Notes.
How do the proposed amendments affect the nature of the upcoming transaction?
The amendments clarify that the transaction involving ArcLight Capital Partners does not constitute a Change of Control under the Indentures.
What is the role of Kinder Morgan in this transaction?
Kinder Morgan, Inc., alongside ArcLight, will share board governance over NGPL Holdings as part of this transaction.
What happens if the required consents are not received?
If the necessary consents are not obtained, NGPL PipeCo may terminate the consent solicitation and possibly conduct a Change of Control Offer instead.
What fees are involved in this process?
Holders who validly consent will receive a fee of $1.00 per $1,000 of their Senior Notes, contingent upon the successful completion of the necessary requirements.
