UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.01 | Entry into a Material Definitive Agreement. |
Purchase Agreement
On January 4, 2021, EQM Midstream Partners, LP (EQM), a wholly owned subsidiary of Equitrans Midstream Corporation (ETRN), entered into a purchase agreement (the Purchase Agreement) with Barclays Capital Inc., as representative of the several initial purchasers named therein (collectively, the Initial Purchasers), and, solely with respect to certain representations and warranties and conditions of the Initial Purchasers’ obligations contained therein, ETRN, relating to the private offering and sale to eligible purchasers (the Notes Offering) in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the Securities Act), by EQM of $800 million aggregate principal amount of new 4.50% senior notes due 2029 (the 2029 Notes) and $1,100 million aggregate principal amount of new 4.75% senior notes due 2031 (the 2031 Notes and, together with the 2029 Notes, the Notes). The Notes will be issued in a transaction exempt from the registration requirements of the Securities Act and resold by the Initial Purchasers in reliance on Rule 144A and Regulation S of the Securities Act. The Notes Offering is expected to close on January 8, 2021, subject to customary closing conditions.
EQM intends to use the net proceeds from the Notes Offering and cash on hand to repay all outstanding borrowings under its term loan agreement (the 2019 Term Loan Agreement), to purchase a portion of its outstanding indebtedness in tender offers with respect to several series of outstanding notes, which commenced on January 4, 2021, with a maximum aggregate principal amount of $500 million (the Tender Offers), and for general partnership purposes. In the event the Tender Offers are not consummated, or the net proceeds from the Notes Offering are otherwise in excess of the amount needed to fund the Tender Offers, EQM intends to use any remaining proceeds to repay certain of its outstanding indebtedness, including borrowings under its $3 billion credit facility (the $3 Billion Facility), or to prefund capital expenditures and/or capital contributions to Mountain Valley Pipeline, LLC.
The Purchase Agreement contains certain representations, warranties, covenants and agreements of EQM, ETRN and the Initial Purchasers and certain conditions to closing, obligations of EQM, ETRN and the Initial Purchasers and termination provisions. EQM has agreed to indemnify the Initial Purchasers against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the Initial Purchasers may be required to make because of any of those liabilities.
The Initial Purchasers and their respective affiliates are full service financial institutions and have engaged, and may in the future engage, in investment banking, commercial banking and other financial advisory and commercial dealings with ETRN and its affiliates, including EQM. Affiliates of certain of the Initial Purchasers are lenders under the 2019 Term Loan Agreement and/or the $3 Billion Facility and, accordingly, may receive a portion of the net proceeds from the Notes Offering through any repayment of indebtedness under the 2019 Term Loan Agreement and/or the $3 Billion Facility. Certain of the Initial Purchasers or their affiliates may own, or manage accounts that own, outstanding indebtedness subject to the Tender Offers. As a result, certain of the Initial Purchasers or their affiliates may receive a portion of the net proceeds from the Notes Offering as a result of the Tender Offers. The Bank of New York Mellon, which is a lender under the $3 Billion Facility, is an affiliate of the trustee under the indenture that will govern the Notes.
The Purchase Agreement and the above descriptions have been included to provide investors and security holders with information regarding the terms of the Purchase Agreement. They are not intended to provide any other factual information about ETRN, EQM, EQGP Services, LLC, the general partner of EQM (the General Partner) or their respective subsidiaries, affiliates, businesses or equity holders. The representations, warranties and covenants contained in the Purchase Agreement were made only for purposes of that agreement and as of specific dates; were solely for the benefit of the parties to the Purchase Agreement; and may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made by each contracting party to the other as a way of allocating contractual risk between them that differ from those applicable to investors. Moreover, the subject matter of the representations and warranties are subject to more recent developments. Accordingly, investors should be aware that these representations, warranties and covenants or any description thereof alone may not describe the actual state of affairs of ETRN, EQM, the General Partner, or their respective subsidiaries, affiliates, businesses or equity holders as of the date they were made or at any other time.
The foregoing description of the Purchase Agreement is not complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and which is incorporated in this Item 1.01 by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit |
Description | |
| 10.1 | Purchase Agreement, dated January 4, 2021, by and among EQM Midstream Partners, LP, Equitrans Midstream Corporation (for certain limited purposes) and Barclays Capital Inc., as representative of the several initial purchasers named on Schedule 1 thereto. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| EQUITRANS MIDSTREAM CORPORATION | ||||||
| Date: January 5, 2020 | By: | /s/ Kirk R. Oliver | ||||
| Name: | Kirk R. Oliver | |||||
| Title: | Senior Vice President and Chief Financial Officer | |||||