Energy Transfer LP priced $2.7 billion of senior notes split evenly across three maturities, using the investment-grade market to term out short-term borrowings as pipeline operators keep spending on gas and liquids networks.
The Dallas partnership sold $900 million of 5.450% notes due 2032 at 99.972% of face value, $900 million of 5.900% notes due 2037 at 99.719% and $900 million of 6.550% notes due 2057 at 99.862%. The offering is expected to settle on Nov. 20.
Refinancing short-term debt
Energy Transfer expects net proceeds of about $2.68 billion before expenses. It plans to use the money to refinance existing debt, including repaying commercial paper and borrowings under its revolving credit facility, and for general partnership purposes. Barclays, Deutsche Bank Securities, Morgan Stanley, RBC Capital Markets and Wells Fargo Securities were joint book-running managers. The notes were sold under an effective shelf registration.
The 30-year tranche gives the company long-dated funding that matches the life of its pipeline assets, while the six- and 11-year pieces fill out the middle of its maturity ladder. Coupons in the mid-5% to mid-6% range reflect the higher long-term rates that issuers across sectors have been paying this autumn.
A large midstream footprint
Energy Transfer owns about 140,000 miles of pipeline and related infrastructure across 44 states, spanning natural gas gathering and storage, crude oil, natural gas liquids and refined products. It also holds the general partner interests and large unit stakes in Sunoco LP and USA Compression Partners. Its units trade on the Texas Stock Exchange under the symbol ET.
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