By Andrea Heisinger
New York, March 8 - DCP Midstream Operating, LP sold $350 million of 4.95% 10-year senior notes on Thursday to yield Treasuries plus 300 basis points, an informed source said.
The deal was priced in line with guidance in the 300 bps area, the source said.
The notes (Baa2/BBB-/BBB-) were priced at 99.535 to yield 5.009%. There is a make-whole call at 45 bps over Treasuries.
Morgan Stanley & Co. LLC and Wells Fargo Securities LLC were the active bookrunners. Passive bookrunners were J.P. Morgan Securities LLC, RBC Capital Markets LLC, RBS Securities Inc. and SunTrust Robinson Humphrey Inc.
The notes are guaranteed by DCP Midstream Partners, LP.
Proceeds are being used to fund the cash portion of the purchase price of the previously announced contribution by DCP Midstream, LLC to the partnership of the additional 66.67% interest in the Southeast Texas system and pay related expenses, to repay all of the outstanding borrowings under its $135 million term loan, and for general partnership purposes, including repayment of borrowings under its revolving credit facility.
If the Southeast Texas transaction is not consummated, proceeds from the offering will be used to repay all of the outstanding borrowings under the partnership's $135 million term loan, to repay debt under its revolver and for general partnership purposes.
The unit of DCP Midstream LLC is a Denver-based joint venture between Spectra Energy and ConocoPhillips.
| Issuer: | DCP Midstream Operating, LP
|
| Guarantor: | DCP Midstream Partners, LP
|
| Issue: | Senior notes
|
| Amount: | $350 million
|
| Maturity: | April 1, 2022
|
| Bookrunners: | Morgan Stanley & Co. LLC, Wells Fargo Securities LLC (active), J.P. Morgan Securities LLC, RBC Capital Markets LLC, RBS Securities Inc., SunTrust Robinson Humphrey Inc. (passive)
|
| Coupon: | 4.95%
|
| Price: | 99.535
|
| Yield: | 5.009%
|
| Spread: | Treasuries plus 300 bps
|
| Call: | Make-whole at Treasuries plus 45 bps
|
| Trade date: | March 8
|
| Settlement date: | March 13
|
| Ratings: | Moody's: Baa2
|
| Standard & Poor's: BBB-
|
| Fitch: BBB-
|
| Price talk: | 300 bps area
|
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