| Item 1.01 | Entry into a Material Definitive Agreement. |
Indenture
On September 22, 2021, CNX Midstream Partners LP (the “Issuer”), a wholly-owned subsidiary of CNX Resources Corporation, completed a private offering (the “Offering”) of $400 million aggregate principal amount of its 4.750% senior notes due 2030 (the “Notes”), along with the related guarantees of the Notes (the “Guarantees”). The Issuer received net proceeds of approximately $394 million from the Offering, after deducting the initial purchasers’ discount and commissions and estimated offering expenses payable by the Issuer, and the Issuer used a portion of such net proceeds from the Offering and cash on hand and borrowings under its revolving credit facility to fund the tender offer with respect to any or all of its outstanding 6.500% senior notes due 2026 (the “2026 notes”), which commenced on September 15, 2021 (the “Tender Offer”). The Issuer will use the remaining net proceeds of the offering and cash on hand and borrowings under its revolving credit facility to fund its previously announced redemptions of any and all 2026 notes that were not purchased in the Tender Offer and remain outstanding on October 15, 2021. The Notes were issued in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and were resold by the initial purchasers in reliance on Rule 144A and Regulation S of the Securities Act.
The Notes and Guarantees were issued pursuant to an indenture (the “Indenture”), dated September 22, 2021, among the Issuer, the guarantors party thereto (the “Guarantors”) and UMB Bank, N.A., as trustee (the “Trustee”). The Notes accrue interest from September 22, 2021 at a rate of 4.750% per year. Interest on the Notes is payable semi-annually in arrears on April 15 and October 15 of each year, beginning April 15, 2022. The Notes mature on April 15, 2030.
The Notes rank equally in right of payment with all of the Issuer’s existing and future senior indebtedness and senior to any subordinated indebtedness that the Issuer may incur. The Guarantees rank equally in right of payment to all of the Guarantors’ existing and future senior indebtedness.
On or after April 15, 2025, the Issuer may redeem all or part of the Notes at the redemption prices set forth below, plus accrued and unpaid interest, if any, to, but not including, the redemption date (subject to the rights of holders of the Notes on the relevant record date to receive interest due on the relevant interest payment date), beginning on March 15 of the years indicated:
| | | | |
| Year | | Percentage | |
2025 | | | 102.375 | % |
2026 | | | 101.188 | % |
2027 and thereafter | | | 100.000 | % |
Prior to April 15, 2025, the Issuer may on one or more occasions redeem up to 40% of the principal amount of the Notes with an amount of cash not greater than the amount of the net cash proceeds from one or more equity offerings at a redemption price equal to 104.750% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but not including, the date of redemption, as long as at least 60% of the aggregate principal amount of the Notes originally issued on the issue date (excluding notes held by the Issuer and its subsidiaries) remains outstanding after each such redemption and the redemption occurs within 180 days after the date of the closing of the equity offering.
At any time or from time to time prior to April 15, 2025, the Issuer may also redeem all or a part of the Notes, at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium, as defined in the Indenture, plus accrued and unpaid interest, if any, to, but not including, the redemption date (subject to the rights of holders of the Notes on the relevant record date to receive interest due on the relevant interest payment date).
The Indenture contains covenants that will limit the ability of the Issuer and the Guarantors to (i) incur, assume or guarantee additional indebtedness or issue preferred stock; (ii) create liens to secure indebtedness; (iii) make distributions on, purchase or redeem equity interests in the Issuer or purchase or redeem subordinated indebtedness; (iv) make investments; (v) restrict dividends, loans or other asset transfers from the Issuer’s restricted subsidiaries; (vi) consolidate with or merge with or into, or sell substantially all of its properties to, another person;
