Plains All American Unveils $1 Billion Senior Notes Offering
Plains All American Secures Funding Through Senior Notes Offering
Plains All American Pipeline, L.P. (Nasdaq: PAA) has recently announced a significant public offering of $1 billion in senior unsecured notes. This offering consists of 5.950% notes due in 2035, which provides a unique financial opportunity for the company. By pricing the offering at 99.761% of their face value, Plains aims to enhance its financial flexibility and growth prospects.
Strategic Use of Proceeds from the Offering
The net proceeds from this substantial offering, estimated to be around $988.1 million, will be allocated towards important strategic initiatives. One of the primary uses is to facilitate the acquisition of Ironwood Midstream Energy Partners II, LLC for roughly $475 million. This acquisition is expected to strengthen the company's position within the midstream energy market.
Additional Financial Enhancements
In addition to the Ironwood acquisition, Plains plans to utilize part of the proceeds for the repurchase of approximately 12.7 million Series A Preferred Units. This repurchase is intended to enhance the company’s capital structure and reflect its commitment to maximizing shareholder value. The repurchase will be conducted at par value, alongside any accrued distributions.
Ensuring Financial Stability
Beyond acquisitions and repurchases, Plains will also use the capital to repay existing amounts under its credit facilities and commercial paper program. These actions aim to solidify the company's financial standing and support ongoing operations. Should the Ironwood acquisition or the preferred unit repurchase not proceed, the funds will still be directed toward general partnership purposes, including further acquisitions and capital expenditures.
Details on the Offering
The offering involves a well-structured plan, as it does not depend on the completion of either the Ironwood Acquisition or the Preferred Unit Repurchase. This independent approach allows Plains to maintain operational flexibility regardless of the outcome of these transactions.
Immediate Support from Banking Partners
Plains has enlisted aid from reputable financial institutions including J.P. Morgan Securities LLC, BMO Capital Markets Corp., Mizuho Securities USA LLC, and Scotia Capital (USA) Inc., who are acting as joint book-running managers for the offering. Their expertise will help ensure that the offering runs smoothly and meets the company's financial goals.
Regulatory Compliance
This public offering is made in compliance with the effective shelf registration statement on Form S-3 that Plains has previously filed with the U.S. Securities and Exchange Commission (SEC). This adherence ensures that all necessary securities regulations are followed, which is vital for maintaining investor confidence and operational legitimacy.
About Plains All American
PAA is a leading publicly traded master limited partnership that focuses on midstream energy infrastructure. The company operates an expansive network of pipelines and provides logistics services for crude oil and natural gas liquids. Plains plays a crucial role in the movement of energy resources throughout the North American continent, handling more than 8 million barrels per day. This robust infrastructure positions the company as a vital player in the energy sector.
Contact Information for Investor Relations
For any inquiries regarding this offering or further information about the company, investors can reach out to the investor relations team.
Blake Fernandez
Michael Gladstein
plainsIR@plains.com
(866) 809-1291
Frequently Asked Questions
What is the purpose of the public offering by Plains All American?
The offering aims to raise capital for strategic acquisitions, capital expenditures, and to enhance overall financial flexibility.
How much capital is Plains All American looking to raise?
The company is seeking to secure $1 billion through its senior unsecured notes offering.
What will the proceeds from the offer be used for?
The proceeds will primarily fund the acquisition of Ironwood Midstream Energy Partners II, repurchase preferred units, and repay existing debts.
Are the acquisitions guaranteed to proceed?
There are no assurances that the Ironwood acquisition and preferred unit repurchase will occur as planned, but the offering itself will proceed independently.
Who are the financial partners involved in this offering?
Key partners include J.P. Morgan Securities, BMO Capital Markets, Mizuho Securities, and Scotia Capital, who will manage the offering.
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