ONEOK's Significant $7 Billion Senior Notes Issuance Explained

ONEOK’s Major $7 Billion Senior Notes Offering

Today, ONEOK, Inc. (NYSE: OKE) made an exciting announcement regarding its plans to issue $7.0 billion in senior notes, a significant financial move that showcases its growth strategy and commitment to sustaining its operations in the ever-evolving energy sector.

Details of the Offer

ONEOK has priced an offering that includes a variety of senior notes across different maturities and interest rates. Here’s the breakdown of the offering:

Composition of the Notes Offering

The offering is structured as follows:

• $1.25 billion in 3-year senior notes with a coupon rate of 4.25%.
• $600 million in 5-year senior notes at a coupon of 4.40%.
• $1.25 billion in 7-year senior notes with a coupon of 4.75%.
• $1.60 billion in 10-year senior notes at a coupon of 5.05%.
• $1.50 billion in 30-year senior notes with a coupon of 5.70%.
• $800 million in 40-year senior notes at a coupon of 5.85%.

The net proceeds from this offering are projected to exceed $6.92 billion after factoring in underwriting discounts, commissions, and offering expenses.

Use of Proceeds

ONEOK plans to allocate the net proceeds towards acquiring Global Infrastructure Partners' interests in both EnLink Midstream, LLC and Medallion Midstream, LLC. This strategic acquisition aligns with ONEOK’s long-term vision and is expected to enhance its operational capacity and market reach.

Additional Financial Flexibility

Any remaining funds will be utilized for general corporate purposes. This could include repaying outstanding debt or redeeming existing notes, which is a prudent approach to managing liabilities.

Closing Timeline and Conditions

The anticipated closing date for this offering is on or around September 24, 2024, contingent upon satisfying standard closing requirements. It's crucial for potential investors to be aware of the conditions surrounding this offering.

Special Mandatory Redemption Clause

There’s a noteworthy provision regarding the 3-year, 5-year, and 7-year notes – they include a 'special mandatory redemption' clause. Should the EnLink Transaction not close by the specified date, the notes will face redemption.

Management and Underwriting Team

In terms of management, a collection of reputable financial institutions will oversee the offering. J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC, and Barclays Capital Inc. are among those acting as joint book-running managers. Additionally, other firms will serve as co-managers.

About ONEOK

Based in Tulsa, Oklahoma, ONEOK, Inc. (NYSE: OKE) plays a pivotal role in the energy sector. They are a major midstream operator providing vital services like gathering, processing, transportation, and storage. With an extensive network of pipelines – over 50,000 miles – their operations significantly contribute to energy security while addressing both domestic and international demands.

Frequently Asked Questions

What is ONEOK's main focus in the energy sector?

ONEOK is focused on midstream operations, including the gathering, processing, and transportation of energy resources such as natural gas and crude oil.

Why is ONEOK raising $7.0 billion?

The funds will primarily be used for the acquisition of interests in EnLink Midstream and Medallion Midstream, enhancing their operational capabilities.

When is the expected closing date for the offering?

The offering is expected to close on or around September 24, 2024, subject to customary conditions.

What types of notes are included in the offering?

The offering includes a variety of senior notes with maturities ranging from 3 years to 40 years, each having different coupon rates.

Who are the main underwriters for the offering?

Main underwriters include J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC, among others, ensuring a strong management team for the offering.

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