|
Item 1.01.
|
Entry into a Material Definitive Agreement.
|
Underwriting Agreement
On January 8,
2019, Energy Transfer Operating, L.P. (the “Partnership”) and its wholly owned subsidiary, Sunoco Logistics Partners Operations L.P. (the “Operating Partnership” and, together with the Partnership, the “Partnership
Parties”), entered into an underwriting agreement (the “Underwriting Agreement”) with Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBC Capital Markets
LLC and SunTrust Robinson Humphrey, Inc., as joint book-running managers and representatives of the several underwriters named therein (collectively, the “Underwriters”), relating to the public offering (the “Offering”) by the
Partnership of $750,000,000 aggregate principal amount of its 4.500% Senior Notes due 2024 (the “2024 Notes”), $1,500,000,000 aggregate principal amount of its 5.250% Senior Notes due 2029 (the “2029 Notes”), and $1,750,000,000
aggregate principal amount of its 6.250% Senior Notes due 2049 (the “2049 Notes” and, together with the 2024 Notes and the 2029 Notes, collectively, the “Notes”). The Notes will initially be fully and unconditionally guaranteed
by the Operating Partnership (the “Guarantees” and, together with the Notes, the “Securities”) on a senior unsecured basis so long as the Operating Partnership guarantees any of the Partnership’s obligations under its
revolving credit facility. The Offering has been registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to a Registration Statement on Form
S-3ASR
(Registration
No. 333-221411)
of the Partnership, as amended by Post-Effective Amendment No. 1 thereto and as supplemented by the Prospectus Supplement dated January 8, 2019 relating to the Securities (together
with the accompanying prospectus dated November 8, 2017, the “Prospectus Supplement”), filed with the Securities and Exchange Commission pursuant to Rule 424(b) of the Securities Act on January 10, 2019.
The Underwriting Agreement contains customary representations, warranties and agreements by the Partnership Parties, and customary conditions
to closing, indemnification obligations of the Partnership Parties and the Underwriters, including for liabilities under the Securities Act, other obligations of the parties and termination provisions. The summary of the Underwriting Agreement in
this report does not purport to be complete and is qualified in its entirety by reference to the full text of the Underwriting Agreement, which is filed as Exhibit 1.1 hereto, and is incorporated herein by reference.
The Offering is expected to close on January 15, 2019, subject to the satisfaction of customary closing conditions. The Partnership
intends to use the expected net proceeds of approximately $3.96 billion from the Offering (i) to make an intercompany loan to Energy Transfer LP (“ET”), which will use the proceeds therefrom to repay in full its
$1.22 billion term loan due February 2, 2024, (ii) to repay in full its 9.70% senior notes due March 15, 2019 and 9.00% senior notes due April 15, 2019 and its subsidiary’s 8.125% senior notes due June 1, 2019, (iii) to
repay a portion of the borrowings under its revolving credit facility and (iv) for general partnership purposes.
Certain Relationships
As more fully described under the caption “Underwriting” in the Prospectus Supplement, from time to time, certain of the Underwriters
and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with the Partnership or its affiliates. They have received, or may in the future receive,
customary fees and commissions for these transactions. Certain of the Underwriters or their affiliates may own a portion of the Partnership’s 9.70% senior notes due March 15, 2019, its 9.00% senior notes due April 15, 2019 and its
subsidiary’s 8.125% senior notes due June 1, 2019, in which case such Underwriters or their affiliates would receive a portion of the net proceeds from the Offering. In addition, affiliates of each of the Underwriters are lenders under
ET’s term loan facility and/or the Partnership’s revolving credit facility and, accordingly, will receive a portion of the net proceeds of the Offering through ET’s refinancing of borrowings under its term loan and the
Partnership’s repayment of borrowings under its revolving credit facility.
