Published on 8/11/2020 in the Prospect News High Yield Daily.
New Issue: Targa Resources prices upsized $1 billion 10.5-year notes at par to yield 4 7/8%
By Paul A. Harris
Portland, Ore., Aug. 11 – Targa Resources Partners LP and Targa Resources Partners Finance Corp. priced an upsized $1 billion issue of 10.5-year senior notes (Ba3/BB) at par to yield 4 7/8% in a Tuesday drive-by, according to market sources.
The issue size increased from $750 million.
The yield printed in the middle of yield talk in the 4 7/8% area. Initial talk was 5% to 5¼%.
Wells Fargo Securities LLC was the left bookrunner.
The Houston-based midstream energy company plans to use the proceeds to refinance its 6¾% senior notes due 2024 by means of a tender offer and to repay debt under its revolving credit facility.
The additional proceeds resulting from the $250 million upsizing of the deal will also be used to repay debt under its revolver.
| Issuers: | Targa Resources Partners LP and Targa Resources Partners Finance Corp.
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| Amount: | $1 billion, increased from $750 million
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| Maturity: | Feb. 1, 2031
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| Securities: | Senior notes
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| Left bookrunner: | Wells Fargo Securities LLC
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| Joint bookrunners: | BofA Securities Inc., Capital One Securities Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and RBC Capital Markets Corp.
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| Senior co-managers: | ING Financial Markets LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Scotia Capital (USA) Inc., SMBC Nikko Securities America Inc., TD Securities (USA) LLC and Truist Securities Inc.
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| Co-managers: | Raymond James & Associates, BMO Capital Markets Corp., CIBC World Markets Corp., Huntington Investment Co. and U.S. Bancorp Investments Inc.
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| Coupon: | 4 7/8%
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| Price: | Par
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| Yield: | 4 7/8%
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| Spread: | 422 bps
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| Call protection: | 5.5 years
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| Trade date: | Aug. 11
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| Settlement date: | Aug. 18
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| Ratings: | Moody's: Ba3
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| S&P: BB
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| Distribution: | Rule 144A and Regulation S with contingent registration rights
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| Price talk: | 4 7/8% area
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| Marketing: | Drive-by
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