UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Date of report) MAY 4, 2006
(Date of earliest event reported) APRIL 28, 2006
NORTHERN BORDER PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 1-12202 93-1120873
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
13710 FNB PARKWAY, OMAHA, NEBRASKA
(Address of principal executive offices)
68154-5200
(Zip code)
(402) 492-7300
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communication pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Securities Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
Guardian Financial Obligations
On April 28, 2006, Northern Border Partners, L.P. acquired the
remaining interests in Guardian bringing our ownership interest to
100%.
In November 2001, Guardian entered into a master shelf agreement with
certain financial institutions that authorized the issuance of senior
notes in an aggregate principal amount not to exceed $170 million.
Between November 2001 and November 2002, Guardian issued ten senior
notes with principal payments due annually beginning June 30, 2003
through 2022. Interest rates on the notes range from 7.61 percent to
8.27 percent with an average rate of 7.85 percent. As of May 4, 2006,
approximately $154.5 million of these senior notes remain
outstanding. Guardian cannot issue additional notes under this master
shelf agreement.
In November 2001, Guardian secured a $10 million credit line that
authorized the issuance of senior floating rate revolving notes.
These notes have a floating rate based on either a United States
dollar prime commercial lending rate or certain United States deposit
rates in the London interbank market plus a spread. At Guardian's
option, these rates may be reset at one-month, three-month, or
six-month periods. As of May 4, 2006, Guardian had one note
outstanding under the credit line in the amount of $1.5 million, with
an interest rate of 5.94 percent and due November 8, 2007.
Guardian's master shelf and revolving note agreements contain certain
financial, operational and legal covenants. Among other things,
Guardian is required to maintain a minimum interest coverage ratio
and a maximum debt ratio. The agreements require the maintenance of a
ratio of (1) EBITDA (net income plus interest expense, income taxes
and depreciation and amortization) to interest expense of not less
than 1.5 to 1 and (2) total indebtedness to EBITDA of not greater
than 6.75 to 1. Upon any breach of these covenants, amounts
outstanding under the note agreements may become due and payable
immediately by Guardian. The debt outstanding under these agreements
is non-recourse to Northern Border Partners. At May 4, 2006, Guardian
was in compliance with its financial covenants.
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ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
The total amount of securities of the Partnership authorized under
any instrument with respect to long-term debt not filed as an exhibit
does not exceed 10% of the total assets of the Partnership and its
subsidiaries on a consolidated basis. The Partnership agrees, upon
request of the Securities and Exchange Commission, to furnish copies
of any or all of such instruments to the Securities and Exchange
Commission.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
Northern Border Partners, L.P.
Date: May 4, 2006 By: /s/ Jim Kneale
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Jim Kneale
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
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