Business Context and Reporting Period
This Form 8-K filing by The Blackstone Group L.P. (Blackstone) reports a material definitive agreement and the creation of a direct financial obligation. The report date is April 7, 2014.
Key Financial Metrics and Debt Obligations
The filing details the issuance of new senior notes with the following terms:
- Principal Amount: $500,000,000
- Instrument: 5.000% Senior Notes due 2044
- Issuer: Blackstone Holdings Finance Co. L.L.C. (an indirect subsidiary)
- Guarantors: The Blackstone Group L.P. and four indirect subsidiaries (Blackstone Holdings I, II, III, and IV L.P.)
- Interest Rate: 5.000% per annum
- Interest Payment Dates: Semiannually on June 15 and December 15, commencing December 15, 2014
- Maturity Date: June 15, 2044
- Security Status: Unsecured and unsubordinated obligations
The filing text does not provide values for revenue, profit, cash flow, margins, or overall liquidity metrics, as this report focuses solely on the debt issuance.
Material Changes and Covenants
The primary material change is the entry into the Fifth Supplemental Indenture to the Base Indenture dated August 20, 2009. Key covenants and provisions include:
- Restrictions: Limitations on incurring indebtedness secured by liens on voting stock or profit-participating equity interests of subsidiaries.
- Asset Disposition: Restrictions on merging, consolidating, or selling, transferring, or leasing assets.
- Events of Default: The Trustee or holders of at least 25% of the outstanding Notes may declare the Notes immediately due and payable upon an event of default after any grace period.
- Automatic Acceleration: Principal and accrued interest become automatically due upon specified events of bankruptcy, insolvency, receivership, or reorganization.
Redemption and Repurchase Provisions
The filing outlines specific conditions for early termination of the debt:
- Make-Whole Redemption: The Issuer may redeem all or a portion of the Notes prior to maturity at a make-whole redemption price.
- Change of Control Repurchase: If a change of control repurchase event occurs, the Issuer must repurchase the Notes at 101% of the aggregate principal amount plus accrued and unpaid interest.
Investor Verification Checklist
- Verify the full text of the Base Indenture (Exhibit 4.1) and Fifth Supplemental Indenture (Exhibit 4.2) for detailed covenant exceptions.
- Confirm the credit rating impact of the new $500 million unsecured debt obligation.
- Review the definition of "Change of Control" within the Indenture to understand repurchase triggers.
- Assess the impact of the 5.000% interest rate on future cash flow requirements relative to current market rates.