Item 5.03 Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On November 16, 2017, in connection with the issuance of the Preferred Units, Energy Transfer Partners GP, L.P. (the “General Partner”) adopted Amendment No. 1 to the Fourth Amended and Restated Agreement of Limited Partnership of the Partnership to established the rights and obligations of the Preferred Units and make other miscellaneous revisions. The Preferred Units entitle their holders to certain rights that are senior to the rights of holders of common units representing limited partner interests in the Partnership (“Common Units”), such as rights to certain distributions and rights upon liquidation of the Partnership.
The Preferred Units rank senior to the Common Units and to any other class or series of the Partnership’s equity interests that may be established after the original issue date of the Preferred Units (the “Original Issue Date”) and that are not expressly made senior to or on parity with the Preferred Units as to the payment of distributions and amounts payable upon a liquidation event. The Preferred Units rank junior to any other class or series of the Partnership’s equity interests that may be established after the Original Issue Date and that are expressly made senior to the Preferred Units to the payment of distributions and amounts payable upon a liquidation event. The Preferred Units have no stated maturity and are not subject to mandatory redemption or any sinking fund and will remain outstanding indefinitely unless repurchased or redeemed by the Partnership, as described below.
Distributions on the Series A Preferred Units are cumulative from the Original Issue Date and will be payable semi-annually in arrears on the 15th day of February and August of each year until February 15, 2023, and thereafter on the 15th day of February, May, August, and November of each year, in each case, when, as, and if declared by the General Partner. A pro-rated initial distribution on the Series A Preferred Units will be payable on February 15, 2018 in an amount equal to approximately $15.451 per Series A Preferred Unit. Distributions on the Series A Preferred Units will be payable out of amounts legally available therefor from and including the Original Issue Date to, but excluding, February 15, 2023 at a rate equal to 6.250% per annum of the $1,000 liquidation preference. On and after February 15, 2023, distributions on the Series A Preferred Units will accumulate for each
distribution period at a percentage of the $1,000 liquidation preference equal to an annual floating rate of the three-month LIBOR plus a spread of 4.028%.
Distributions on the Series B Preferred Units are cumulative from the Original Issue Date and will be payable semi-annually in arrears on the 15th day of February and August of each year until February 15, 2028, and thereafter on the 15th day of February, May, August, and November of each year, in each case, when, as, and if declared by the General Partner. A pro-rated initial distribution on the Series B Preferred Units will be payable on February 15, 2018 in an amount equal to approximately $16.378 per Series B Preferred Unit. Distributions on the Series B Preferred Units will be payable out of amounts legally available therefor from and including the Original Issue Date to, but excluding, February 15, 2028 at a rate equal to 6.625% per annum of the $1,000 liquidation preference. On and after February 15, 2028, distributions on the Series B Preferred Units will accumulate for each distribution period at a percentage of the $1,000 liquidation preference equal to an annual floating rate of the three-month LIBOR plus a spread of 4.155%.
The Series A Preferred Units may be redeemed by the Partnership at its option (i) following the occurrence of certain ratings agency events, in whole but not in part, out of funds legally available for such redemption, at a redemption price in cash of $1,020 per Series A Preferred Unit plus an amount equal to all accumulated and unpaid distributions thereon to, but not including, the date of redemption, whether or not declared, or (ii) at any time on or after February 15, 2023, in whole or in part, out of funds legally available for such redemption, at a redemption price in cash of $1,000 per Series A Preferred Unit plus an amount equal to all accumulated and unpaid distributions thereon to, but not including, the date of redemption, whether or not declared.
The Series B Preferred Units may be redeemed by the Partnership at its option (i) following the occurrence of certain ratings agency events, in whole but not in part, out of funds legally available for such redemption, at a redemption price in cash of $1,020 per Series B Preferred Unit plus an amount equal to all accumulated and unpaid distributions thereon to, but not including, the date of redemption, whether or not declared, or (ii) at any time on or after February 15, 2028, in whole or in part, out of funds legally available for such redemption, at a redemption price in cash of $1,000 per Series B Preferred Unit plus an amount equal to all accumulated and unpaid distributions thereon to, but not including, the date of redemption, whether or not declared.
Holders of Preferred Units will generally have no voting rights, except for limited voting rights with respect to (i) potential amendments to the Partnership Agreement that would have a material adverse effect on the existing terms of the Preferred Units, (ii) the creation or issuance of any securities on parity with the Preferred Units.