NGPL PipeCo LLC Announces Consent Solicitation for Indenture Amendments
NGPL PipeCo LLC, a Delaware limited liability company, has initiated solicitations of consents from the holders of its 4.875% Senior Notes due 2027 and 3.250% Senior Notes due 2031 to approve certain amendments to the indentures governing these debt securities. The consents are being sought in conjunction with the previously announced transaction in which Brookfield Infrastructure US Holdings I, a Delaware corporation, will sell entities holding its entire 25.0% interest in NGPL Holdings LLC, the Company’s indirect parent company, to one or more funds controlled by ArcLight Capital Partners, LLC.
Background
NGPL PipeCo LLC is a company that has issued debt securities in the form of senior notes. Specifically, it has issued 4.875% Senior Notes due 2027 and 3.250% Senior Notes due 2031. These notes have indentures, which are agreements between the issuer and the trustee, that outline the terms and conditions of the notes. The indentures for the 2027 Notes and 2031 Notes are governed by the 2027 Notes Indenture and 2031 Notes Indenture, respectively, both of which are between NGPL PipeCo LLC and U.S. Bank National Association.
Proposed Amendments
The Company has announced that it is seeking consents from the holders of the Notes to make certain amendments to the Indentures. The Proposed Amendments include:
- Modifications to the definition of “Consolidated Total Assets” and “Consolidated Total Debt” in the Indentures to exclude certain assets and liens.
- Addition of a provision allowing the Company to pay fees and expenses incurred in connection with certain transactions.
- Modification of the notice of default and event of default provisions to allow the Company to cure certain defaults.
Transaction Connection
The Consent Solicitation is being conducted in connection with the previously announced Transaction. In this Transaction, Brookfield Infrastructure US Holdings I has agreed to sell entities that hold its entire 25.0% interest in NGPL Holdings LLC to one or more funds controlled by ArcLight Capital Partners, LLC. The Proposed Amendments to the Indentures are necessary to facilitate the Transaction.
Impact on Holders
The Consent Solicitation may affect Holders in several ways:
- Holders who consent to the Proposed Amendments will receive a consent payment, which is typically a small fee.
- The Proposed Amendments may impact the creditworthiness of the Company and, consequently, the value of the Notes.
- If a sufficient number of Holders do not consent to the Proposed Amendments, the Transaction may not be able to proceed.
Impact on the World
The implications of this announcement extend beyond the Holders of NGPL PipeCo LLC’s Notes:
- The Transaction represents a significant investment by ArcLight Capital Partners, LLC in the energy infrastructure sector.
- The Proposed Amendments may set a precedent for other companies seeking to modify their indentures in connection with mergers and acquisitions.
- The success of the Consent Solicitation and the Transaction may impact the broader debt markets and the confidence of investors in the ability of companies to modify the terms of their debt securities.
Conclusion
NGPL PipeCo LLC’s announcement of a Consent Solicitation for certain amendments to the indentures governing its 4.875% Senior Notes due 2027 and 3.250% Senior Notes due 2031 is an important development in the context of the previously announced Transaction involving the sale of entities that hold a significant portion of NGPL Holdings LLC, the Company’s indirect parent company. The Proposed Amendments may impact Holders in various ways and have broader implications for the debt markets and the energy infrastructure sector. As the Consent Solicitation progresses, it will be essential to monitor developments closely.
Disclaimer: This article is for informational purposes only and should not be considered financial or legal advice. Readers should consult their own financial and legal advisors for guidance on their specific situations.
