Item 1.01 | Entry into a Material Definitive Agreement. |
Purchase Agreement
On September 24, 2018, Tallgrass Energy Partners, LP (“TEP”), Tallgrass Energy Finance Corp., a wholly owned subsidiary of TEP (the“Co-Issuer” and together with TEP, the “Issuers”), and TEP’s existing direct and indirect wholly owned subsidiaries (other than theCo-Issuer, the “Guarantors”), entered into a purchase agreement (the “Purchase Agreement”) with Wells Fargo Securities, LLC, as representative of the several initial purchasers named therein (the “Initial Purchasers”), pursuant to which the Issuers agreed to sell $500,000,000 in aggregate principal amount of the Issuers’ 4.75% Senior Notes due 2023 (the “Notes”), and the Guarantors agreed to provide the guarantees of the Notes. The Notes were offered and sold in a transaction exempt from the registration requirements under the Securities Act of 1933, as amended (the “Securities Act”). The Notes were sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act and to persons outside the United States in reliance on Regulation S under the Securities Act.
Tallgrass Energy, LP is the managing member of and owns approximately 55.46% of the outstanding membership interests of Tallgrass Equity, LLC (“Tallgrass Equity”). TEP is a wholly-owned subsidiary of Tallgrass Equity and its subsidiaries.
The Purchase Agreement contains customary representations and warranties of the parties and indemnification and contribution provisions under which the Issuers and the Guarantors, on one hand, and the Initial Purchasers, on the other, have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act, and customary conditions to closing, obligations of the parties and termination provisions.
The Initial Purchasers and certain of their affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. The Initial Purchasers and certain of their affiliates have, from time to time, performed, and may in the future perform, various commercial and investment banking and financial advisory services for TEP and its affiliates, for which they received or may in the future receive customary fees and expenses. In particular, affiliates of the Initial Purchasers are lenders under TEP’s revolving credit facility.
The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, which is filed with this Current Report on Form8-K as Exhibit 1.1 and is incorporated herein by reference.
Indenture and Notes
On September 26, 2018, the Issuers, the Guarantors named therein and U.S. Bank National Association, as trustee, entered into an Indenture dated as of September 26, 2018 (the “Indenture”), governing the terms of the Notes. The Notes are general unsecured senior obligations of the Issuers. The Notes are unconditionally guaranteed jointly and severally on a senior unsecured basis by the Guarantors and will be guaranteed by certain of TEP’s future