Energy Transfer Partners prices $700 million; existing preferreds weaken; indexes dip

By Cristal Cody

Tupelo, Miss., April 17 – Energy Transfer Operating, LP tapped the preferred primary market on Wednesday with a $700 million issue of fixed-to-floating rate cumulative redeemable perpetual preferred units.

Energy Transfer Operating priced $700 million of the $25-par series E fixed-to-floating rate cumulative redeemable perpetual preferred units with a 7.6% dividend, according to an FWP filing with the Securities and Exchange Commission.

The deal included 28 million units (Ba2/BB/BB), along with a greenshoe of $105 million, or 4.2 million shares.

The preferreds will reset May 15, 2024 from a fixed rate to a floating rate of Libor plus 516.1 basis points.

BofA Merrill Lynch, Morgan Stanley & Co. LLC, RBC Capital Markets LLC and Wells Fargo Securities LLC were the bookrunners.

The company plans to apply to list the units on the New York Stock Exchange under the symbol “ETPPrE”. In the interim, the preferreds were added to over-the-counter trading under the symbol “ETPEP” on Wednesday afternoon.

Meanwhile, Energy Transfer Operating’s existing preferreds traded weaker over the session.

Indexes softened at the start of Wednesday’s session and weakened further over the day after ending Tuesday flat to improved.

The Wells Fargo Hybrid and Preferred Securities index declined 0.11% on Wednesday.

The U.S. iShares Preferred Stock ETF was off 0.22% at $36.62.

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