Business Context and Reporting Period
This Form 8-K filing by The Blackstone Group L.P. (Blackstone) reports material events occurring on September 29, 2017, and October 2, 2017. The filing details the completion of a new senior notes offering and the results of a cash tender offer for existing debt.
Key Financial Metrics and Debt Activity
- New Debt Issuance: Blackstone issued $600 million in aggregate principal amount of new senior notes.
- $300 million of 3.150% Senior Notes due 2027.
- $300 million of 4.000% Senior Notes due 2047.
- Debt Repurchase (Tender Offer): Blackstone conducted a cash tender offer for its 6.625% Senior Notes due 2019.
- Total tendered and not withdrawn: $259,682,000.
- Outstanding Tender Notes tendered via guaranteed delivery: $31,000 (subject to delivery requirements).
- Interest Payments: Interest on the new notes accrues from October 2, 2017, and is payable semiannually on April 2 and October 2, commencing April 2, 2018.
Material Changes and Transaction Details
The filing represents a material change in the company's capital structure through the entry into definitive agreements for the new notes and the reduction of outstanding 2019 debt via the tender offer. The new notes are unsecured and unsubordinated obligations of Blackstone Holdings Finance Co. L.L.C., fully and unconditionally guaranteed by The Blackstone Group L.P. and its indirect subsidiaries.
Terms, Risks, and Contingencies
- Redemption Terms:
- Make-Whole Redemption: Available prior to July 2, 2027 (for 2027 Notes) and April 2, 2047 (for 2047 Notes).
- Par Redemption: Available on or after the dates mentioned above at par plus accrued interest.
- Change of Control: If a change of control repurchase event occurs, the Issuer must repurchase the notes at 101% of the aggregate principal amount plus accrued interest.
- Covenants: The indenture includes limitations on incurring indebtedness secured by liens on voting stock or profit-participating equity interests of subsidiaries, as well as restrictions on mergers, consolidations, or asset sales.
- Events of Default: Includes bankruptcy, insolvency, receivership, or reorganization, which would cause the notes to become immediately due and payable.
Investor Verification Checklist
- Verify the final settlement of the $259,682,000 tendered amount for the 2019 Notes, including the $31,000 subject to guaranteed delivery procedures.
- Review the full text of the Base Indenture and Supplemental Indentures (Exhibits 4.1 through 4.5) for specific covenant limitations and default triggers.
- Confirm the use of proceeds from the $600 million new issuance as detailed in the press release (Exhibit 99.1).
- Monitor the impact of the new debt issuance on the company's overall leverage ratios and liquidity position.