Published on 4/5/2018 in the Prospect News High Yield Daily.
New Issue: Targa Resources prices upsized $1 billion eight-year notes at par to yield 5 7/8%
By Paul A. Harris
Portland, Ore., April 5 – Targa Resources Partners LP priced an upsized $1 billion issue of eight-year senior notes (Ba3/BB-) at par to yield 5 7/8% on Thursday, according to market sources.
The amount was raised from $750 million.
The yield printed in the middle of the 5¾% to 6% yield talk and at the tight end of early guidance that was set in the 6% area.
Joint bookrunner BofA Merrill Lynch will bill and deliver. Barclays, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., RBC Capital Markets LLC and Wells Fargo Securities LLC were also joint bookrunners.
The Houston-based company plans to use the proceeds to repay bank debt and for general partnership purposes, which may include redeeming or repurchasing some of its outstanding notes, as well as for working capital, capital expenditures and acquisitions.
The issuer is a Delaware limited partnership formed in October 2006 by its parent, Targa Resources Corp., to own, operate, acquire and develop midstream energy assets.
| Issuer: | 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: | April 15, 2026
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| Securities: | Senior notes
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| Bookrunners: | BofA Merrill Lynch (bill and deliver), Barclays, Citigroup, Deutsche Bank, RBC, Wells Fargo
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| Co-lead managers: | Credit Suisse, Goldman Sachs, JP Morgan, Morgan Stanley, SunTrust, TD Securities
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| Co-managers: | ING, SMBC Nikko, Citizens, Huntington, Scotia
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| Coupon: | 5 7/8%
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| Price: | Par
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| Yield: | 5 7/8%
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| Spread: | 307 bps
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| Call protection: | Three years
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| Trade date: | April 5
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| Settlement date: | April 12
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| Ratings: | Moody’s: Ba3
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| S&P: BB-
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| Distribution: | Rule 144A with contingent registration rights
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| Price talk: | 5¾% to 6%
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| Marketing: | Quick to market
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