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Item 1.01
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Entry into a Material Definitive Agreement.
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September 2020 364-Day Revolving Credit Agreement
On September 8, 2020, Enterprise Products Operating LLC, a Texas limited liability company (“EPO”) and the operating subsidiary of Enterprise Products Partners L.P., a Delaware limited partnership (the “Partnership”), entered into a 364-Day Revolving Credit Agreement among EPO, as Borrower; Citibank, N.A. as Administrative Agent; JPMorgan Chase Bank, N.A., Mizuho Bank, Ltd., MUFG Union Bank, Ltd., Truist Bank and Wells Fargo Bank, National Association, as Co-Syndication Agents; The Bank of Nova Scotia, Houston Branch, Barclays Bank PLC, Royal Bank of Canada, Sumitomo Mitsui Banking Corp., and The Toronto-Dominion Bank, New York Branch, as Co-Documentation Agents; and the lenders party thereto (the “September 2020 364-Day Credit Agreement”). Under the terms of the September 2020 364-Day Credit Agreement, EPO may borrow up to $1.5 billion (which may be increased by up to $200 million to $1.7 billion at EPO’s election, provided certain conditions are met) at a variable interest rate for a term of 364 days, subject to the terms and conditions set forth therein.
The September 2020 364-Day Credit Agreement replaces EPO’s existing 364-Day Revolving Credit Agreement, dated as of September 10, 2019 (which provided for an aggregate borrowing capacity of $1.5 billion and had a maturity date of September 8, 2020), among EPO, Citibank N.A., as Administrative Agent, and the lenders party thereto. EPO may use the proceeds from loans under the September 2020 364-Day Credit Agreement for working capital, capital expenditures, acquisitions and other company purposes.
EPO’s obligations under the September 2020 364-Day Credit Agreement are not secured by any collateral; however, they are guaranteed by the Partnership pursuant to a Guaranty Agreement (the “September 2020 Guaranty Agreement”). Amounts borrowed under the September 2020 364-Day Credit Agreement mature on September 7, 2021, although EPO may, between 15 and 60 days prior to the maturity date, elect to have the entire principal balance then outstanding continued as non-revolving term loans for a period of one additional year, payable on September 7, 2022.
In addition to interest payments on outstanding borrowings, on a quarterly basis, EPO is required to pay a facility fee on each lender’s commitment irrespective of commitment usage. The facility fee amount and the applicable rate spread for loans under the September 2020 364-Day Credit Agreement will vary based on EPO’s senior debt credit rating.
The September 2020 364-Day Credit Agreement contains customary representations, warranties, covenants (affirmative and negative) and events of default, the occurrence of which would permit the lenders to accelerate the maturity date of amounts borrowed under the September 2020 364-Day Credit Agreement. The September 2020 364-Day Credit Agreement also restricts EPO’s ability to pay cash distributions to the Partnership if an event of default (as defined in the September 2020 364-Day Credit Agreement) has occurred and is continuing at the time such distribution is scheduled to be paid or would result therefrom.
The descriptions of the September 2020 364-Day Credit Agreement and the September 2020 Guaranty Agreement in this Item 1.01 are qualified in their entirety by reference to the full text of the September 2020 364-Day Credit Agreement and the September 2020 Guaranty Agreement, which are filed as Exhibits 10.1 and 10.2 hereto, respectively, and incorporated herein by reference.
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Item 1.02
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Termination of a Material Definitive Agreement.
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Termination of April 2020 364-Day Revolving Credit Agreement
As previously disclosed, in order to provide an incremental $1.0 billion of borrowing capacity in addition to the aggregate borrowing capacity then available under its existing credit agreements, on April 3, 2020 EPO entered into a 364-Day Revolving Credit Agreement among EPO, as Borrower; Citibank, N.A. as Administrative Agent; and the lenders party thereto (the “April 2020 364-Day Credit Agreement”). The April 2020 364-Day Credit Agreement enhanced EPO’s financial flexibility during the economic downturn caused by the COVID-19 pandemic. Under the terms of the April 2020 364-Day Credit Agreement, EPO could borrow up to $1.0 billion at a variable interest rate for a term of 364 days (maturing on April 2, 2021), subject to the terms and conditions set forth therein.
In August 2020, EPO issued $1.0 billion in principal amount of 3.20% senior notes due February 2052 and $250.0 million in principal amount of 2.80% reopened senior notes due January 2030. EPO received aggregate net proceeds of $1.25 billion from the sale of such senior notes after deducting underwriting discounts and other estimated offering expenses.
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