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Item 1.01
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Entry into a Material Definitive Agreement.
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Indenture and Senior Notes
On January 8, 2021, EQM Midstream Partners, LP (EQM), a wholly owned subsidiary of Equitrans Midstream Corporation (ETRN), completed its previously announced private offering of $800 million aggregate principal amount of new 4.50% senior notes due 2029 (the 2029 Notes) and $1,100 million aggregate principal amount of new 4.75% senior notes due 2031 (the 2031 Notes and, together with the 2029 Notes, the Notes).
The Notes were issued under and are governed by an indenture, dated January 8, 2021 (the Indenture), between EQM and the Bank of New York Mellon Trust Company, N.A., as trustee (the Trustee). The Indenture contains covenants that limit EQM’s ability to, among other things, incur certain liens securing indebtedness, engage in certain sale and leaseback transactions, and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all of EQM’s assets. The 2029 Notes will mature on January 15, 2029 and interest on the 2029 Notes is payable semi-annually on January 15 and July 15 of each year, commencing July 15, 2021. The 2031 Notes will mature on January 15, 2031 and interest on the 2031 Notes is payable semi-annually on January 15 and July 15 of each year, commencing July 15, 2021.
The Notes are unsecured and rank equally with all of EQM’s existing and future senior obligations. The Notes are senior in right of payment to any of EQM’s future obligations that are, by their terms, expressly subordinated in right of payment to the Notes. The Notes are effectively subordinated to EQM’s secured obligations, if any, to the extent of the value of the collateral securing such obligations, and structurally subordinated to all indebtedness and obligations, including trade payables, of EQM’s subsidiaries, other than any subsidiaries that may guarantee the Notes in the future.
EQM may, at its option, redeem some or all of the 2029 Notes and the 2031 Notes, in whole or in part, at any time prior to their maturity at the applicable redemption price as set forth in the Indenture.
Upon the occurrence of a Change of Control Triggering Event (as defined in the Indenture), EQM may be required to offer to purchase the Notes at a purchase price equal to 101% of the aggregate principal amount of the Notes repurchased, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.
The Indenture contains certain events of default (each an Event of Default), including the following: (1) default in the payment of interest on such Notes when due that continues for 30 days; (2) default in the payment of principal of or premium, if any, on any such Notes when due, whether at its stated maturity, upon redemption or otherwise; (3) failure by EQM or any subsidiary guarantor, if any, to comply for 90 days with the other agreements with respect to such Notes contained in the Indenture after written notice by the Trustee or by the holders of at least 25% in principal amount of the outstanding Notes of such series; (4) certain events of bankruptcy, insolvency or reorganization of EQM or any subsidiary guarantor, if any, that is one of EQM’s Significant Subsidiaries (as defined in the Indenture); and (5) if such Notes are guaranteed by a subsidiary guarantor that is one of EQM’s Significant Subsidiaries, (a) the guarantee of that subsidiary guarantor ceases to be in full force and effect, except as otherwise provided in the Indenture; (b) the guarantee of that subsidiary guarantor is declared null and void in a judicial proceeding; or (c) that subsidiary guarantor denies or disaffirms its obligations under the Indenture or its guarantee.
If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding Notes of such series may declare the Notes of such series to be due and payable. Upon such a declaration, such principal, premium, if any, and accrued and unpaid interest on such Notes will be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization occurs, all outstanding Notes will become due and payable immediately without further action or notice on the part of the Trustee or any holders of the Notes.
The Bank of New York Mellon, which is a lender under EQM’s $3 billion credit facility, is an affiliate of the Trustee. Additionally, the Trustee acts as trustee under indentures that govern other outstanding notes of EQM.