Targa Resources Corp. 8-K Summary
Business Context and Reporting Period
This Form 8-K was filed by Targa Resources Corp. on October 11, 2016, reporting events occurring on October 7, 2016. The filing concerns Targa Resources Partners LP, a subsidiary of the registrant, and details the restructuring of its primary credit facility.
Key Financial Metrics and Debt Structure
The filing announces the entry into a Third Amended and Restated Credit Agreement. Key terms include:
- Revolving Credit Facility: Initial aggregate principal amount of up to $1,600,000,000.
- Accordion Feature: Option to increase the maximum aggregate principal amount by up to $500,000,000 in the future.
- Swing Line Sub-facility: Up to $100,000,000.
- Maturity Date: October 7, 2020.
- Administrative Agent: Bank of America, N.A.
The filing text does not provide specific values for revenue, profit, cash flow, margins, or current liquidity positions beyond the new credit facility terms.
Material Changes
The primary material change is the amendment and restatement of the existing credit facility. Additionally, Targa Pipeline Partners LP (formerly Atlas Pipeline Partners, L.P.) and certain subsidiaries were designated as "Restricted Subsidiaries" under the new agreement. These subsidiaries are required to execute supplemental indentures to become guarantors of the Partnership's outstanding senior notes.
Outlook, Risks, and Unusual Items
The Credit Agreement includes provisions triggered by an "Investment Grade Event." Upon such an event, the Partnership may request the release of all security interests in all "Collateral." The agreement matures in 2020, at which time all unpaid principal and interest are due. No specific management commentary on future earnings or operational risks is provided in this filing.
Investor Verification Checklist
- Verify the full text of the Third Amended and Restated Credit Agreement (Exhibit 10.1) for covenants and fees.
- Confirm the status of the supplemental indentures executed by Targa Pipeline Partners LP and its subsidiaries.
- Monitor the company's credit rating to assess the potential for an "Investment Grade Event" and subsequent release of collateral.
- Review the utilization of the $1.6 billion revolving facility and the $100 million swing line in subsequent quarterly reports.