| Debt Obligations | Note 8 — De bt Obligations
December 31, 2024 December 31, 2023
Current:
Partnership accounts receivable securitization facility, due August 2025 (1) $ 330.0 $ 575.0
Finance lease liabilities 57.7 45.7
Current debt obligations 387.7 620.7
Long-term:
Term loan facility, variable rate, due July 2025 (2) — 500.0
TRGP senior revolving credit facility, variable rate, due February 2027 (3) 1,130.5 175.0
Senior unsecured notes issued by TRGP:
5.200 % fixed rate, due July 2027 750.0 750.0
6.150 % fixed rate, due March 2029 1,000.0 1,000.0
4.200 % fixed rate, due February 2033 750.0 750.0
6.125 % fixed rate, due March 2033 900.0 900.0
6.500 % fixed rate, due March 2034 1,000.0 1,000.0
5.500 % fixed rate, due February 2035 1,000.0 —
4.950 % fixed rate, due April 2052 750.0 750.0
6.250 % fixed rate, due July 2052 500.0 500.0
6.500 % fixed rate, due February 2053 850.0 850.0
Unamortized discount ( 29.4 ) ( 29.5 )
Senior unsecured notes issued by the Partnership: (4)
6.500 % fixed rate, due July 2027 705.2 705.2
5.000 % fixed rate, due January 2028 700.3 700.3
6.875 % fixed rate, due January 2029 679.3 679.3
5.500 % fixed rate, due March 2030 949.6 949.6
4.875 % fixed rate, due February 2031 1,000.0 1,000.0
4.000 % fixed rate, due January 2032 1,000.0 1,000.0
13,635.5 12,179.9
Debt issuance costs, net of amortization ( 89.0 ) ( 90.8 )
Finance lease liabilities 240.4 244.1
Long-term debt 13,786.9 12,333.2
Total debt obligations $ 14,174.6 $ 12,953.9
Irrevocable standby letters of credit: (3)
Letters of credit outstanding under the TRGP senior revolving credit facility $ 17.6 $ 22.3 (1) As of December 31, 2024, the Partnership had $ 330.0 million of qualifying receivables under its $ 600.0 million accounts receivable securitization facility (the “Securitization Facility”), resulting in $ 270.0 million of availability. (2) On May 21, 2024, we repaid the remaining balance and subsequently terminated the Term Loan Facility. As a result of the repayment, we recorded a loss due to debt extinguishment of $ 0.8 million. (3) We maintain the Commercial Paper Program, the borrowings of which are supported through maintaining a minimum available borrowing capacity under the New TRGP Revolver equal to the aggregate amount outstanding under the Commercial Paper Program. As of December 31, 2024, the Existing TRGP Revolver had no borrowings outstanding and the Commercial Paper Program had $ 1,130.5 million in borrowings outstanding, resulting in approximately $ 1,601.9 million of available liquidity, after accounting for outstanding letters of credit. (4) We guarantee all of the Partnership’s outstanding senior unsecured notes. The following table shows the range of interest rates and weighted average interest rate incurred on our variable-rate debt obligations during the year ended December 31, 2024:
Range of Interest Rates Incurred Weighted Average Interest Rate Incurred
Existing TRGP Revolver and Commercial Paper Program 4.8 % - 6.2 % 5.7 %
Securitization Facility 5.2 % - 6.4 % 6.1 %
Term Loan Facility (1) 6.7 % - 6.8 % 6.7 % (1) Interest rates were calculated through the redemption date of May 21, 2024. Compliance with Debt Covenants As of December 31, 2024, we were in compliance with the covenants contained in our various debt agreements. We and certain of our subsidiaries are parties to a parent guarantee whereby each party to the agreement unconditionally guarantees, jointly and severally, the payment of all of the obligations of the Partnership and Targa Resources Partners Finance Corporation (together with the Partnership, the “Partnership Issuers”) under the respective indentures governing the Partnership Issuers’ senior unsecured notes. Debt Obligations Partnership’s Accounts Receivable Securitization Facility The Securitization Facility provides up to $ 600.0 million of borrowing capacity at SOFR rates plus a margin. In August 2024, the Partnership amended the Securitization Facility to, among other things, extend the termination date of the Securitization Facility to August 29, 2025 . Under the Securitization Facility, certain Partnership subsidiaries sell or contribute certain qualifying receivables, without recourse, to another of its consolidated subsidiaries (Targa Receivables LLC or “TRLLC”), a special purpose consolidated subsidiary created for the sole purpose of the Securitization Facility. TRLLC, in turn, sells an undivided percentage ownership in the eligible receivables to third-party financial institutions. Sold or contributed receivables up to the amount of the outstanding debt under the Securitization Facility are not available to satisfy the claims of the creditors of the selling or contributing subsidiaries or the Partnership. Any excess receivables are eligible to satisfy the claims. New TRGP Credit Agreement In February 2025, the Company entered into a Credit Agreement with Bank of America, N.A., as the Administrative Agent and Swing Line Lender, the letter of credit issuers party thereto and the other lenders party thereto (the “New TRGP Revolver”). The New TRGP Revolver provides for a revolving credit facility in an initial aggregate principal amount up to $ 3.5 billion (with an option to increase such maximum aggregate principal amount by up to $ 500.0 million in the future, subject to the terms of the New TRGP Revolver) and a swing line sub-facility of up to $ 150.0 million. The New TRGP Revolver matures on February 18, 2030 . We will be able to extend the maturity date, subject to the required lenders’ consent, by one year up to two times. The revolving credit facility bears interest at the Company’s option at: (a) the Base Rate (as such term is defined in the New TRGP Revolver), which is the highest of Bank of America’s prime rate, the federal funds rate plus 0.5 % and the Term SOFR (as such term is defined in the New TRGP Revolver) rate plus 1.0 % (subject in each case to a floor of 0.0 %), plus an applicable margin ranging from 0.0 % to 0.625 %, dependent on the Company’s non-credit-enhanced senior unsecured long-term debt ratings (or, if no such debt is outstanding at such time, then the corporate, issuer or similar rating with respect to the Company that has been most recently announced) (the “Debt Rating”), or (b) Term SOFR (which is subject to a floor of 0.0 % and includes, for Term SOFR loans, a SOFR adjustment of plus 0.10 %) plus an applicable margin ranging from 1.00 % to 1.625 %, dependent on the Company’s Debt Rating. The Company is required to pay a commitment fee equal to an applicable rate ranging from 0.10 % to 0.275 % (dependent on the Company’s Debt Rating), in each case times the actual daily unused portion of the revolving credit facility. The obligations under the New TRGP Revolver are guaranteed by Targa Resources GP LLC, Targa Energy GP LLC, Targa Resources LLC, Targa Resources Partners LP, Targa Energy LP, Targa GP Inc., Targa LP Inc., and Targa Resources Finance Corporation. The New TRGP Revolver shall also be guaranteed by each existing and future direct and indirect wholly-owned subsidiary of the Company that is an obligor on or otherwise guarantees the obligations in respect of the existing notes indebtedness of Targa Resources Partners LP. The New TRGP Revolver requires the Company to maintain a Consolidated Leverage Ratio (as such term is defined in the New TRGP Revolver), determined as of the last day of each quarter for the four-fiscal quarter period ending on the date of determination, of no more than 5.50 to 1.00 . For any four-fiscal-quarter-period during which a material acquisition occurs, the total leverage ratio may, at the Company’s option, be determined on a pro forma basis as though such event had occurred as of the first day of such four-fiscal-quarter-period. The New TRGP Revolver restricts the Company’s ability to make dividends to stockholders if an event of default (as defined in the New TRGP Revolver) exists or would result from such distribution. In addition, the New TRGP Revolver contains various covenants that may limit, among other things, the Company’s ability to grant liens, merge or consolidate, and engage in transactions with affiliates and the ability of the Company’s non-guarantor subsidiaries to incur indebtedness. The New TRGP Revolver also contains various customary events of default, the occurrence of which could result in a termination of the lenders’ commitments and the acceleration of all of our obligations thereunder. Existing TRGP Credit Agreement In February 2022, the Company entered into the Existing TRGP Revolver with Bank of America, N.A., as the Administrative Agent, Collateral Agent and Swing Line Lender, the Letter of Credit issuers party thereto and the lenders party thereto. The Existing TRGP Revolver provided for a revolving credit facility in an initial aggregate principal amount up to $ 2.75 billion (with an option to increase such maximum aggregate principal amount by up to $ 500.0 million in the future, subject to the terms of the Existing TRGP Revolver) and a swing line sub-facility of up to $ 100.0 million. The Existing TRGP Revolver was scheduled to mature on February 17, 2027 . In connection with entering into the New TRGP Revolver, we terminated the Existing TRGP Revolver. In February 2022, TRGP and the Partnership received a corporate investment grade credit rating from Standard & Poor’s Financial Services LLC (“S&P”) and Fitch Ratings Inc., and in March 2022, the Partnership received a corporate investment grade credit rating from Moody’s Ratings (“Moody’s”). As a result, in accordance with the Existing TRGP Revolver, the collateral under the Existing TRGP Revolver was released from the liens securing our obligations thereunder. The revolving credit facility bore interest at the Company’s option at: (a) the Base Rate (as such term is defined in the Existing TRGP Revolver), which is the highest of Bank of America’s prime rate, the federal funds rate plus 0.5 % and the Term SOFR (as such term is defined in the Existing TRGP Revolver) rate plus 1.0 % (subject in each case to a floor of 0.0 %), plus an applicable margin ranging from 0.125 % to 0.75 %, dependent on the Company’s non-credit-enhanced senior unsecured long-term debt ratings (or, if no such debt was outstanding at such time, then the corporate, issuer or similar rating with respect to the Company that had been most recently announced) (the “Debt Rating”), or (b) Term SOFR (which included, for Term SOFR loans, a SOFR adjustment of plus 0.10 %) plus an applicable margin ranging from 1.125 % to 1.75 %, dependent on the Company’s Debt Rating. The Company was required to pay a commitment fee equal to an applicable rate ranging from 0.125 % to 0.35 % (dependent on the Company’s Debt Rating), in each case times the actual daily unused portion of the revolving credit facility. The obligations under the Existing TRGP Revolver were guaranteed by certain of the domestic subsidiaries of the Company, including by the Partnership. The Existing TRGP Revolver required the Company to maintain a ratio of consolidated funded indebtedness to consolidated adjusted EBITDA (the “Consolidated Leverage Ratio”), determined as of the last day of each quarter for the four-fiscal quarter period ending on the date of determination, of no more than 5.50 to 1.00 . The Existing TRGP Revolver restricted the Company’s ability to make dividends to stockholders if an event of default (as defined in the Existing TRGP Revolver) existed or would have resulted from such distribution. In addition, the Existing TRGP Revolver contained various covenants that may have limited, among other things, the Company’s ability to incur subsidiary indebtedness, grant liens, make investments, repay or amend the terms of certain other indebtedness, merge or consolidate, sell assets, and engage in transactions with affiliates. Commercial Paper Program In July 2022, we established the Commercial Paper Program. Under the terms of the Commercial Paper Program, we may issue, from time to time, unsecured commercial paper notes with varying maturities of less than one year. Amounts available under the Commercial Paper Program may be issued, repaid and re-issued from time to time, with the maximum aggregate face or principal amount outstanding at any one time not to exceed $ 3.5 billion, subject to documentation requirements of the Commercial Paper Program. We maintain a minimum available borrowing capacity under the New TRGP Revolver equal to the aggregate amount outstanding under the Commercial Paper Program to support our issued commercial paper notes. The Commercial Paper Program is guaranteed by each subsidiary that guarantees the New TRGP Revolver. The commercial paper notes are presented in Long-term debt on our Consolidated Balance Sheets. TRGP’s Senior Unsecured Notes All issues of our senior unsecured notes (the “TRGP Notes”) rank pari passu with our existing and future senior indebtedness, including debt issued under the New TRGP Revolver and the Commercial Paper Program, and rank senior in right of payment to any of our future subordinated indebtedness. The TRGP Notes are unconditionally guaranteed by certain of our subsidiaries that guarantee the New TRGP Revolver. Each guarantee ranks equally in right of payment with all of such guarantor’s existing and future unsecured senior debt and other unsecured guarantees of senior debt. The notes and the guarantees are effectively junior to any secured indebtedness of ours or any guarantor to the extent of the value of the assets securing such indebtedness and structurally subordinated to all indebtedness and other obligations of our subsidiaries that do not guarantee the notes. Interest on all issues of TRGP Notes is payable semi-annually. The indenture governing the TRGP Notes restricts (i) our ability and the ability of our subsidiaries to incur liens and (ii) TRGP’s ability to merge or consolidate with or sell, lease, convey, transfer or otherwise dispose of all or substantially all of its assets to another company. These covenants are subject to a number of important exceptions and qualifications. We may redeem the TRGP Notes, in whole or in part, at any time prior to the applicable par call date at a redemption price equal to the principal amount plus an applicable make-whole premium, plus accrued and unpaid interest, to the redemption date, as specified in the indenture of each series. After the applicable par call date, the TRGP Notes may be redeemed at a price equal to par, plus accrued and unpaid interest to the redemption date, as specified in the indenture of each series. In the future, we may redeem, purchase or exchange certain of our outstanding debt through redemption calls, cash purchases and/or exchanges for other debt, in open market purchases, privately negotiated transactions or otherwise. Such calls, repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. Partnership’s Senior Unsecured Notes All issues of the Partnership’s senior unsecured notes are pari passu with the Partnership’s existing and future senior indebtedness. They are senior in right of payment to any of the Partnership’s future subordinated indebtedness and are unconditionally guaranteed by the Partnership’s restricted subsidiaries. These notes are effectively subordinated to all secured indebtedness under the Securitization Facility, which is secured by accounts receivable pledged under the facility, to the extent of the value of the collateral securing that indebtedness. Interest on all issues of senior unsecured notes is payable semi-annually in arrears. The Partnership’s senior unsecured notes and associated indenture agreements restrict, among other things, (i) the Partnership’s ability and the ability of certain of its subsidiaries to incur liens and (ii) the Partnership’s ability to merge or consolidate with or sell, lease, convey, transfer or otherwise dispose of all or substantially all of its assets to another company. These covenants are subject to a number of important exceptions and qualifications. The Partnership may redeem its senior unsecured notes, in whole or in part, at any time prior to their applicable maturity at a redemption price equal to the principal amount plus an applicable make-whole premium, plus accrued and unpaid interest and liquidation damages, if any, to the redemption date, as specified in the indenture of each series. The Partnership may also redeem up to 35 % of the aggregate principal amount of each series of its senior unsecured notes at the redemption dates and prices set forth in the indenture governing such series plus accrued and unpaid interest and liquidation damages, if any, to the redemption date with the net cash proceeds of one or more equity offerings, provided that: (i) at least 65 % of the aggregate principal amount of each such notes (excluding notes held by the Partnership and its subsidiaries) remains outstanding immediately after the occurrence of such redemption; and (ii) the redemption occurs within 180 days of the date of the closing of such equity offering. In the future, we or the Partnership may redeem, purchase or exchange certain of our and the Partnership’s outstanding debt through redemption calls, cash purchases and/or exchanges for other debt, in open market purchases, privately negotiated transactions or otherwise. Such calls, repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. Senior Unsecured Notes Issuances In April 2022, we completed an underwritten public offering of (i) $ 750.0 million aggregate principal amount of our 4.200 % Senior Unsecured Notes due 2033 (the “ 4.200 % Notes”) and (ii) $ 750.0 million aggregate principal amount of our 4.950 % Senior Unsecured Notes due 2052 (the “ 4.950 % Notes”), resulting in net proceeds of approximately $ 1.5 billion. The 4.200 % Notes and the 4.950 % Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by our subsidiaries that guarantee the New TRGP Revolver, so long as such subsidiary guarantors satisfy certain conditions. The 4.200 % Notes and the 4.950 % Notes were issued pursuant to the Indenture, dated as of April 6, 2022, as supplemented by that certain First Supplemental Indenture, dated as of April 6, 2022, among us, such subsidiary guarantors and U.S. Bank Trust Company, National Association, as trustee. A portion of the net proceeds from the issuance was used to fund the concurrent cash tender offer (the “March Tender Offer”) and the subsequent redemption of the Partnership’s 5.875 % Senior Unsecured Notes due April 2026 (the “ 5.875 % Notes”), with the remainder of the net proceeds used for repayment of the outstanding borrowings under the Existing TRGP Revolver. See “Debt Repurchases and Extinguishments” for further details of the March Tender Offer. In July 2022, we completed an underwritten public offering of the 5.200 % Notes and the 6.250 % Notes, resulting in net proceeds of approximately $ 1.2 billion. The 5.200 % Notes and the 6.250 % Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by our subsidiaries that guarantee the New TRGP Revolver, so long as such subsidiary guarantors satisfy certain conditions. The 5.200 % Notes and the 6.250 % Notes were issued pursuant to the Indenture, dated as of April 6, 2022, as supplemented by that certain Third Supplemental Indenture, dated as of July 7, 2022, among us, such subsidiary guarantors and U.S. Bank Trust Company, National Association, as trustee. We used the net proceeds from the issuance to fund a portion of the Delaware Basin Acquisition. In January 2023, we completed an underwritten public offering of (i) $ 900.0 million aggregate principal amount of our 6.125 % Senior Unsecured Notes due 2033 (the “ 6.125 % Notes”) and (ii) $ 850.0 million aggregate principal amount of our 6.500 % Senior Unsecured Notes due 2053 (the “January 2023 6.500 % Notes”), resulting in net proceeds of approximately $ 1.7 billion. The 6.125 % Notes and the January 2023 6.500 % Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by our subsidiaries that guarantee the New TRGP Revolver, so long as such subsidiary guarantors satisfy certain conditions. The 6.125 % Notes and the January 2023 6.500% Notes were issued pursuant to the Indenture, dated as of April 6, 2022, as supplemented by that certain Fifth Supplemental Indenture, dated as of January 9, 2023, among us, such subsidiary guarantors and U.S. Bank Trust Company, National Association, as trustee. We used a portion of the net proceeds from the issuance to fund the Grand Prix Transaction and the remaining proceeds for general corporate purposes, including to reduce borrowings under the Existing TRGP Revolver and the Commercial Paper Program. In November 2023, we completed an underwritten public offering of (i) $ 1.0 billion aggregate principal amount of our 6.150 % Senior Unsecured Notes due 2029 (the “2023 6.150 % Notes”) and (ii) $ 1.0 billion aggregate principal amount of our 6.500 % Senior Unsecured Notes due 2034 (the “November 2023 6.500 % Notes”), resulting in net proceeds of approximately $ 2.0 billion. The 2023 6.150 % Notes and the November 2023 6.500 % Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by our subsidiaries that guarantee the New TRGP Revolver, so long as such subsidiary guarantors satisfy certain conditions. The 2023 6.150 % Notes and the November 2023 6.500 % Notes were issued pursuant to the Indenture, dated as of April 6, 2022, as supplemented by that certain Seventh Supplemental Indenture, dated as of November 9, 2023, among us, such subsidiary guarantors and U.S. Bank Trust Company, National Association, as trustee. We used a portion of the net proceeds to repay $ 1.0 billion in borrowings under the Term Loan Facility and the remaining net proceeds for general corporate purposes, including to repay borrowings under the Commercial Paper Program. In August 2024, we completed an underwritten public offering of $ 1.0 billion aggregate principal amount of our 5.500 % Senior Unsecured Notes due 2035 (the “ 5.500 % Notes”), resulting in net proceeds of approximately $ 990.1 million. The 5.500 % Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by our subsidiaries that guarantee the New TRGP Revolver, so long as such subsidiary guarantors satisfy certain conditions. The 5.500 % Notes were issued pursuant to the Indenture, dated as of April 6, 2022, as supplemented by that certain Ninth Supplemental Indenture, dated as of August 9, 2024, among us, each subsidiary guarantor and U.S. Bank Trust Company, National Association, as trustee. We used the net proceeds from the issuance to repay borrowings under the Commercial Paper Program, a portion of which were incurred to repay the remaining balance under the Term Loan Facility, and for general corporate purposes. Debt Repurchases & Extinguishments In February 2022, in connection with entering into the Existing TRGP Revolver, we terminated the previous TRGP senior secured revolving credit facility (the “Previous TRGP Revolver”) and the Partnership’s senior secured revolving credit facility (the “Partnership Revolver”). As a result of the termination of the Previous TRGP Revolver and the Partnership Revolver, we recorded a loss of $ 0.8 million due to a write-off of debt issuance costs. The Partnership redeemed all of the outstanding 5.375 % Senior Unsecured Notes due 2027 (the “5.375% Notes”) in March 2022 with available liquidity under the Existing TRGP Revolver. As a result of the redemption of the 5.375% Notes, we recorded a loss due to debt extinguishment of $ 15.0 million comprised of $ 12.6 million of premiums paid and a write-off of $ 2.4 million of debt issuance costs. Concurrent with the 4.200 % Notes and the 4.950 % Notes offering, we commenced the March Tender Offer to redeem subject to certain terms and conditions, any and all of the Partnership’s outstanding 5.875 % Notes. As a result of the March Tender Offer and the subsequent redemption of the 5.875% Notes, we recorded a loss due to debt extinguishment of $ 33.8 million comprised of $ 29.3 million of premiums paid and a write-off of $ 4.5 million of debt issuance costs in April 2022. In November 2023, in connection with the 2023 6.150 % Notes and November 2023 6.500 % Notes, we repaid borrowings under the Term Loan Facility and the Commercial Paper Program. As a result of the repayment of borrowings under the Term Loan Facility, we recorded a loss of $ 2.1 million due to a write-off of debt issuance costs. In May 2024, we repaid the Term Loan Facility, which bore interest at the Company’s option at: (a) the Base Rate (as defined in the Term Loan Facility), which was the highest of the (i) federal funds rate plus 0.5 %, (ii) Mizuho’s prime rate, and (iii) the Term SOFR (as defined in the Term Loan Facility) rate plus 1.0 % (subject in each case to a floor of 0.0 %), plus an applicable margin ranging from 0.125 % to 0.75 % dependent on the Company’s non-credit-enhanced senior unsecured long-term debt ratings (or, if no such debt is outstanding at such time, then the Debt Rating), or (b) Term SOFR plus 0.10 % plus an applicable margin ranging from 1.125 % to 1.75 % dependent on the Debt Rating. As a result of the repayment, we recorded a loss due to debt extinguishment of $ 0.8 million. The following table shows the contractually scheduled maturities of our debt obligations outstanding at December 31, 2024, for the next five years, and in total thereafter:
Scheduled Maturities of Debt
Total 2025 2026 2027 2028 2029 Thereafter
Existing TRGP Revolver and Commercial Paper Program $ 1,130.5 $ — $ — $ 1,130.5 $ — $ — $ —
TRGP Senior unsecured notes 7,500.0 — — 750.0 — 1,000.0 5,750.0
Partnership’s Senior unsecured notes 5,034.4 — — 705.2 700.3 679.3 2,949.6
Securitization Facility 330.0 330.0 — — — — —
Total $ 13,994.9 $ 330.0 $ — $ 2,585.7 $ 700.3 $ 1,679.3 $ 8,699.6 |
