Business Context and Reporting Period
Company: NGL Energy Partners LP
Filing Type: Form 8-K (Current Report)
Date of Report: August 24, 2016
Event: Entry into a Material Definitive Agreement (Equity Distribution Agreement).
Key Financial Metrics
This filing does not report specific revenue, profit, cash flow, margin, or debt figures. The primary financial metric disclosed is the authorization to sell common units with an aggregate offering price of up to $200,000,000.
Material Changes and Agreements
- Equity Distribution Agreement: Entered into on August 24, 2016, with Wells Fargo Securities, LLC, SunTrust Robinson Humphrey, Inc., and Credit Suisse Securities (USA) LLC.
- Sale Method: "At the market" offerings via the New York Stock Exchange, market makers, or electronic communication networks.
- Principal Sales: The Partnership may also sell units to Managers as principals under separate terms agreements.
- Registration: Units will be issued under a shelf registration statement (Form S-3, No. 333-212316) declared effective on July 27, 2016.
Use of Proceeds and Management Commentary
Net proceeds from sales, after deducting commissions and offering expenses, are intended for general partnership purposes, specifically:
- Repayment of debt.
- Acquisitions.
- Capital expenditures.
Related Party Transactions: Affiliates of the Managers are lenders under the Partnership's revolving credit facility. If proceeds are used to repay this facility, these affiliates may receive a portion of the funds.
Investor Verification Checklist
- Verify the current market price of NGL Energy Partners LP common units to assess potential dilution from the $200 million offering.
- Review the full text of the Equity Distribution Agreement (Exhibit 1.1) for specific commission rates and termination provisions.
- Monitor future filings to determine the actual volume of units sold and the specific allocation of proceeds between debt repayment and capital expenditures.
- Check the status of the Partnership's revolving credit facility to understand the potential impact of debt repayment on liquidity.