| Item 7.01 | Regulation FD Disclosure. |
The information contained in the following Item 8.01 related to, and the accompanying, Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of the general incorporation language of such filing, except as shall be expressly set forth by specific reference in such filing.
On January 3, 2023, Targa Resources Corp. (the “Company”) and certain of its subsidiary guarantors named therein (the “Subsidiary Guarantors”) entered into an underwriting agreement (the “Underwriting Agreement”) with Truist Securities, Inc., MUFG Securities Americas Inc., RBC Capital Markets, LLC and TD Securities (USA) LLC, as representatives of the several underwriters named therein, pursuant to which the Company agreed to issue and sell $1.75 billion in aggregate principal amount of senior notes (the “Offering”) consisting of (i) $900,000,000 in aggregate principal amount of the Company’s 6.125% Senior Notes due 2033 (the “2033 Notes”) and (ii) $850,000,000 in aggregate principal amount of the Company’s 6.500% Senior Notes due 2053 (the “2053 Notes” and, together with the 2033 Notes, the “Notes”).
The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by the Subsidiary Guarantors. The Underwriting Agreement contains customary representations and warranties by the Company. The Underwriting Agreement also contains customary indemnification and contribution provisions whereby the Company and the underwriters have agreed to indemnify each other against certain liabilities. The Notes were offered and sold under a prospectus supplement and related prospectus filed with the Securities and Exchange Commission pursuant to a shelf registration statement on Form S-3 (File No. 333-263730), as amended.
The Notes will be issued pursuant to that certain Indenture, dated as of April 6, 2022 (the “Base Indenture”), as supplemented by that certain Fifth Supplemental Indenture (the “Fifth Supplemental Indenture” and, together with the Base Indenture, the “Indenture”) among the Company, the Subsidiary Guarantors and U.S. Bank Trust Company, National Association, as trustee. The 2033 Notes will mature on March 15, 2033. The 2053 Notes will mature on February 15, 2053. Interest on the 2033 Notes will be payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2023. Interest on the 2053 Notes will be payable semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2023. Interest on the Notes will accrue from January 9, 2023. The Company may redeem all or a part of the Notes at any time at the applicable redemption prices.
Upon the occurrence of an event of default under the Indenture, which includes payment defaults, defaults in the performance of affirmative and negative covenants and bankruptcy and insolvency related defaults, the obligations of the Company under the Notes may be accelerated, in which case the entire principal amount of the Notes would be immediately due and payable.
The foregoing description of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the Underwriting Agreement, a copy of which is filed as Exhibit 1.1 to this Current Report on Form 8-K and incorporated herein by reference.
The Company expects to use a portion of the net proceeds from the Offering to fund the acquisition of Blackstone Energy Partners’ 25 percent interest in its Grand Prix NGL Pipeline for aggregate cash consideration of approximately $1.05 billion, subject to certain closing adjustments (the “Grand Prix Transaction”). The closing of the Offering is not contingent on the consummation of the Grand Prix Transaction. The Company expects the remaining net proceeds from the Offering to be used for general corporate purposes, including to reduce borrowings under its revolving credit facility and its unsecured commercial paper note program (the “Commercial Paper Program”). If the Company does not complete the Grand Prix Transaction, it expects to use the net proceeds from the Offering for general corporate purposes, including to reduce borrowings under its revolving credit facility and the Commercial Paper Program. Other general corporate purposes may include repayment of other indebtedness, capital expenditures, additions to working capital, investments in its subsidiaries and other acquisitions.
Certain of the underwriters or their respective affiliates have performed investment banking, financial advisory and commercial banking services for the Company and certain of the Company’s affiliates, for which they have received customary compensation, and they may continue to do so in the future. Truist Securities, Inc. served as the Company’s
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