Item 1.01 Entry Into a Material Definitive Agreement.
WGP RCF Amendment
On December 19, 2018, Western Gas Equity Partners, LP (the “Partnership”) amended its senior secured revolving credit facility (the “WGP RCF”), dated March 14, 2016, among itself, Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent, and the lenders party thereto, to extend the maturity date from March 14, 2019 to the earlier of (i) June 14, 2019 or (ii) three business days following the consummation of the transactions (the “Transactions”) contemplated by the Contribution Agreement and Agreement and Plan of Merger (the “Merger Agreement”), dated November 7, 2018, among Anadarko Petroleum Corporation and certain affiliates, including the Partnership and Western Gas Partners, LP (“WES”).
WES RCF Amendment
On December 19, 2018, WES entered into an amendment (the “WES Amendment”) to its senior unsecured revolving credit agreement (the “WES RCF”), dated February 15, 2018, among itself, Wells Fargo, as administrative agent, and the lenders party thereto to provide for (i) subject to the consummation of the Transactions, an increase to the size of the facility from $1.5 billion to $2.0 billion, while leaving the $0.5 billion accordion feature of the WES RCF unexercised; and (ii) effective on February 15, 2019, the exercise of one of WES’s one-year extension options to extend the maturity date of the WES RCF to February 15, 2024.
As of December 19, 2018, there was $220.0 million outstanding on the WES RCF (with $4.6 million in outstanding letters of credit). The above summary of the WES Amendment is qualified in its entirety by reference to the WES Amendment, a copy of which is filed as Exhibit 10.2 hereto and incorporated herein by reference.
WES 364-day Facility
On December 19, 2018, WES entered into a $2.0 billion 364-day senior unsecured credit agreement (the “364-day Facility”), the proceeds of which will be used to fund substantially all of the cash portion of the consideration under the Merger Agreement and the payment of related transaction costs. The 364-day Facility will mature on the day prior to the one-year anniversary of the consummation of the Transactions, and will bear interest at LIBOR, plus applicable margins ranging from 1.000% to 1.625%, or an alternate base rate equal to the greatest of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus 0.5%, or (c) LIBOR plus 1%, in each case as defined in the 364-day Facility and plus applicable margins currently ranging from zero to 0.625%, based upon WES’s senior unsecured debt rating. WES is also required to pay a ticking fee of 0.175% on the commitment amount beginning 90 days after the effective date of the credit agreement through the date of funding under the 364-day Facility. The 364-day Facility contains covenants and customary events of default that are substantially similar to the WES RCF. Additionally, funding of the 364-day Facility is conditioned upon the consummation of the Transactions, and net cash proceeds received from future asset sales and debt or equity offerings of WES must be used to repay amounts outstanding under the 364-day Facility.
The above summary of the 364-day Facility is qualified in its entirety by reference to the 364-day Facility, a copy of which is filed as Exhibit 10.3 hereto and incorporated herein by reference.
Relationships
Certain of the lenders under the WGP RCF, the WES RCF and the 364-day Facility and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory, commercial and investment banking services for the Partnership and WES, for which they received or may receive customary fees and expenses. Certain affiliates of such lenders have acted, and may in the future act, as underwriters of certain of the Partnership’s and WES’s debt and equity issuances.