Item 1.01 Entry into a Material Definitive Agreement.
Purchase Agreement
On January 4, 2021, EQM Midstream Partners, LP (EQM), a wholly owned subsidiary
of Equitrans Midstream Corporation (ETRN), entered into a purchase agreement
(the Purchase Agreement) with Barclays Capital Inc., as representative of the
several initial purchasers named therein (collectively, the Initial Purchasers),
and, solely with respect to certain representations and warranties and
conditions of the Initial Purchasers' obligations contained therein, ETRN,
relating to the private offering and sale to eligible purchasers (the Notes
Offering) in a transaction exempt from the registration requirements of the
Securities Act of 1933, as amended (the Securities Act), by EQM of $800 million
aggregate principal amount of new 4.50% senior notes due 2029 (the 2029 Notes)
and $1,100 million aggregate principal amount of new 4.75% senior notes due 2031
(the 2031 Notes and, together with the 2029 Notes, the Notes). The Notes will be
issued in a transaction exempt from the registration requirements of the
Securities Act and resold by the Initial Purchasers in reliance on Rule 144A and
Regulation S of the Securities Act. The Notes Offering is expected to close on
January 8, 2021, subject to customary closing conditions.
EQM intends to use the net proceeds from the Notes Offering and cash on hand to
repay all outstanding borrowings under its term loan agreement (the 2019 Term
Loan Agreement), to purchase a portion of its outstanding indebtedness in tender
offers with respect to several series of outstanding notes, which commenced on
January 4, 2021, with a maximum aggregate principal amount of $500 million (the
Tender Offers), and for general partnership purposes. In the event the Tender
Offers are not consummated, or the net proceeds from the Notes Offering are
otherwise in excess of the amount needed to fund the Tender Offers, EQM intends
to use any remaining proceeds to repay certain of its outstanding indebtedness,
including borrowings under its $3 billion credit facility (the $3 Billion
Facility), or to prefund capital expenditures and/or capital contributions to
Mountain Valley Pipeline, LLC.
The Purchase Agreement contains certain representations, warranties, covenants
and agreements of EQM, ETRN and the Initial Purchasers and certain conditions to
closing, obligations of EQM, ETRN and the Initial Purchasers and termination
provisions. EQM has agreed to indemnify the Initial Purchasers against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments the Initial Purchasers may be required to make because of any of those
liabilities.
The Initial Purchasers and their respective affiliates are full service
financial institutions and have engaged, and may in the future engage, in
investment banking, commercial banking and other financial advisory and
commercial dealings with ETRN and its affiliates, including EQM. Affiliates of
certain of the Initial Purchasers are lenders under the 2019 Term Loan Agreement
and/or the $3 Billion Facility and, accordingly, may receive a portion of the
net proceeds from the Notes Offering through any repayment of indebtedness under
the 2019 Term Loan Agreement and/or the $3 Billion Facility. Certain of the
Initial Purchasers or their affiliates may own, or manage accounts that own,
outstanding indebtedness subject to the Tender Offers. As a result, certain of
the Initial Purchasers or their affiliates may receive a portion of the net
proceeds from the Notes Offering as a result of the Tender Offers. The Bank of
New York Mellon, which is a lender under the $3 Billion Facility, is an
affiliate of the trustee under the indenture that will govern the Notes.
The Purchase Agreement and the above descriptions have been included to provide
investors and security holders with information regarding the terms of the
Purchase Agreement. They are not intended to provide any other factual
information about ETRN, EQM, EQGP Services, LLC, the general partner of EQM (the
General Partner) or their respective subsidiaries, affiliates, businesses or
equity holders. The representations, warranties and covenants contained in the
Purchase Agreement were made only for purposes of that agreement and as of
specific dates; were solely for the benefit of the parties to the Purchase
Agreement; and may be subject to limitations agreed upon by the parties,
including being qualified by confidential disclosures made by each contracting
party to the other as a way of allocating contractual risk between them that
differ from those applicable to investors. Moreover, the subject matter of the
representations and warranties are subject to more recent developments.
Accordingly, investors should be aware that these representations, warranties
and covenants or any description thereof alone may not describe the actual state
of affairs of ETRN, EQM, the General Partner, or their respective subsidiaries,
affiliates, businesses or equity holders as of the date they were made or at any
other time.
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The foregoing description of the Purchase Agreement is not complete and is
qualified in its entirety by reference to the full text of the Purchase
Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and
which is incorporated in this Item 1.01 by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
10.1 Purchase Agreement, dated January 4, 2021, by and among EQM
Midstream Partners, LP, Equitrans Midstream Corporation (for certain
limited purposes) and Barclays Capital Inc., as representative of the
several initial purchasers named on Schedule 1 thereto.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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