Item 1.01
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Entry into a Material Definitive Agreement.
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On January 16, 2019, DCP Midstream, LP (the Partnership), DCP Midstream Operating, LP (the Operating Partnership),
and certain of their affiliates (collectively, with the Partnership and the Operating Partnership, the Partnership Entities) entered into an underwriting agreement (the Underwriting Agreement) with Mizuho Securities USA LLC,
Barclays Capital Inc. and SunTrust Robinson Humphrey, Inc., as representatives of the several underwriters named therein (the Underwriters), providing for the issuance and sale by the Operating Partnership, and the purchase by the
Underwriters (the Offering) of an additional $325 million aggregate principal amount of its 5.375% Senior Notes due 2025 (the Additional Notes). The Additional Notes are fully and unconditionally guaranteed by DCP
Midstream, LP and are additional notes to the existing $500 million aggregate principal amount of 5.375% Senior Notes due 2025 that the Operating Partnership issued on July 17, 2018 (the Existing Notes). The Additional Notes
and the Existing Notes (together, the Notes) have identical terms, other than the issue date, and will be treated as a single series of debt securities. The Notes will mature on July 15, 2025 unless redeemed prior to maturity.
Interest on the Notes is payable semi-annually in arrears on January 15 and July 15 of each year, beginning on July 15, 2019.
The Offering was registered under the Securities Act of 1933, as amended (the Securities Act), pursuant to a Registration
Statement on Form
S-3
(Registration Nos.
333-221419
and
333-221419-01)
filed with the
Securities and Exchange Commission (the Commission) on November 8, 2017, as supplemented by a prospectus supplement, filed with the Commission on January 18, 2019, pursuant to Rule 424(b)(2) of the Securities Act.
Pursuant to the Underwriting Agreement, the Partnership Entities have agreed, among other things, to indemnify the Underwriters against
certain liabilities, including liabilities arising under the Securities Act, or to contribute to payments the Underwriters may be required to make in respect of those liabilities.
The foregoing description of the terms of the Underwriting Agreement is qualified in its entirety by reference to the full text of the
Underwriting Agreement, which is filed as Exhibit 1.1 to this Current Report on Form
8-K
and is incorporated herein by reference.
The Operating Partnership intends to use the net proceeds from the Offering for general partnership purposes, including the funding of capital
expenditures and the repayment of indebtedness under its revolving credit facility. Affiliates of the Underwriters are lenders under the Operating Partnerships revolving credit facility. To the extent the Operating Partnership uses proceeds
from the Offering to repay indebtedness under its revolving credit facility, such affiliates may receive a portion of the net proceeds from the Offering.
The Notes constitute a series of debt securities under an indenture dated as of September 30, 2010 (the Base Indenture)
between the Operating Partnership and The Bank of New York Mellon Trust Company, N.A., as trustee (the Trustee), as amended and supplemented by the Third Supplemental Indenture dated as of June 14, 2012 (the Third Supplemental
Indenture) by and among the Operating Partnership, the Partnership and the Trustee, as further supplemented by the Seventh Supplemental Indenture dated as of July 17, 2018 (the Seventh Supplemental Indenture and, together with
the Base Indenture and the Third Supplemental Indenture, the Indenture) by and among the Operating Partnership, the Partnership and the Trustee, setting forth the specific terms applicable to the Notes.
The Notes are the Operating Partnerships senior unsecured obligations and will rank equally in right of payment with all of the
Operating Partnerships other existing and future senior unsecured indebtedness, and senior in right of payment to any of its subordinated indebtedness. The Notes are not initially guaranteed by any of the Operating Partnerships
subsidiaries, but are fully and unconditionally guaranteed by the Partnership. The guarantees of the Notes by the Partnership will rank equally in right of payment with the Partnerships existing and future senior unsecured indebtedness and
senior in right of payment to any subordinated debt the Partnership may incur.
Prior to April 15, 2025, the Operating Partnership
will have the right to redeem the Notes, in whole or in part, at a redemption price equal to the greater of (1) 100% of the principal amount of the Notes to be redeemed, and (2) the sum of the present values of the principal amount of the Notes
to be redeemed and the remaining scheduled payments of interest on such Notes (exclusive of interest accrued to the redemption date) discounted from their respective scheduled payment dates to the redemption date on a semiannual basis (assuming a
360-day
year consisting of twelve
30-day
months) at the Treasury Rate (as defined in the Seventh Supplemental Indenture) plus 50 basis points, plus, in either case, accrued
and unpaid interest, if any, on the principal amount being redeemed to, but not including, such redemption date. At any time on or after April 15, 2025, the Operating Partnership will have the right to redeem the Notes, in whole or in part, at
a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the redemption date.