| Item 1.01 | Entry into a Material Definitive Agreement. |
On December 15, 2023, Kinetik Holdings Inc. (the “Company”) and a subsidiary of the Company, Kinetik Holdings LP (“Kinetik LP”), entered into a purchase agreement (the “Purchase Agreement”) by and among Kinetik LP, the Company as parent guarantor, and Wells Fargo Securities, LLC as representative of the several initial purchasers named therein (collectively, the “Initial Purchasers”), relating to the issuance and sale (the “Notes Offering”) of $300 million aggregate principal amount of Sustainability-Linked Senior Notes due 2028 (the “Notes”). The Notes were priced at 100.500% of par, plus accrued and unpaid interest from December 6, 2023, and the Notes will be issued at 6.625% of their face amount. The Notes are being offered as additional notes under the indenture dated as of December 6, 2023, as may be supplemented from time to time (the “Indenture”), pursuant to which Kinetik LP has previously issued $500.0 million aggregate principal amount of 6.625% Sustainability-Linked Senior Notes due 2028 (the “Existing Notes”). The Notes will have substantially identical terms, other than the issue date and issue price, as the Existing Notes, and the Notes and the Existing Notes will be treated as a single series of securities under the Indenture and will vote together as a single class.
The Notes will be offered and sold to the Initial Purchasers in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) and will be resold to qualified institutional buyers in reliance on Rule 144A and Regulation S of the Securities Act. The closing of the issuance and sale of the Notes is expected to occur on December 19, 2023, subject to customary closing conditions. The Notes are fully and unconditionally guaranteed by the Company.
Kinetik LP intends to use the net proceeds from the Notes Offering to repay a portion of the outstanding borrowings under its existing term loan credit facility.
The Purchase Agreement contains customary representations and warranties of the parties and indemnification and contribution provisions under which the Company and Kinetik LP, 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. A copy of the Purchase Agreement is filed as Exhibit 10.1 to this report and is incorporated herein by reference. The description of the Purchase Agreement in this report is a summary and is qualified in its entirety by the terms of the Purchase Agreement.
On December 15, 2023, the Company issued press releases announcing the launching and pricing of the Notes. Copies of the press release are attached hereto as Exhibits 99.1 and 99.2 and are incorporated herein by reference.
The press releases shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state. The Notes will not be registered under the Securities Act or any state securities law and may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act and applicable state securities laws.
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