HOUSTON, Nov. 16,
2023 /PRNewswire/ -- As part of its previously
announced strategic alternatives review, Summit Midstream Partners,
LP (NYSE: SMLP) ("Summit," "SMLP" or the "Partnership")
announces the execution of an opportunistic refinancing of its
senior notes due 2025 (the "2025 Unsecured Notes") and amendment to
its asset-based lending credit facility ("ABL Facility").
Purpose of the Transaction
- Provides for a holistic refinancing solution of the 2025
Unsecured Notes
- Eliminates any material near-term maturities and provides
additional runway to continue to de-lever
- Enables SMLP to evaluate its ongoing strategic alternatives
review from a position of strength and financial flexibility
Heath Deneke, President, Chief
Executive Officer, and Chairman, commented, "We are pleased to
announce this opportunistic refinancing and would like to thank our
bondholders and banks for their continued support. This transaction
highlights the significant momentum in the business and allows
Summit to more fully evaluate its ongoing strategic alternatives
review in a position of strength with plenty of running room on
debt maturities. We are pleased with the continued and growing
level of interest from third parties for potential transactions,
ranging from the sale of specific assets to consideration for the
entire Partnership and other strategic transactions. Looking ahead,
we remain on track to achieve our fourth quarter 2023 guidance
range of $75 to $85 million and approximately $300 million of LTM Adjusted EBITDA during the
first half of 2024. The maturity extension and bank amendment
provides additional runway to enable the Partnership to benefit
from the expected Adjusted EBITDA growth and continued
de-levering of the balance sheet."
Transaction Overview
SMLP has entered into a privately negotiated agreement to issue
a total of $209.5 million aggregate
principal amount of unsecured notes (the "2026 Unsecured Notes") in
exchange for $180.0 million aggregate
principal amount of existing 2025 Unsecured Notes, which such notes
will be cancelled, and $29.5 million
in cash. The new money raised will be used to redeem or repurchase
existing 2025 Unsecured Notes (collectively, the "Transactions")
that are not exchanged. Following the consummation of the
Transactions, approximately $49.9
million of 2025 Unsecured Notes are expected to remain
outstanding. The 2026 Unsecured Notes will bear interest at 12.00%
and mature on October 15, 2026, in
line with the maturity date of SMLP's existing 8.50% senior second
lien notes due 2026.
Concurrent to the Transactions, SMLP will execute an amendment
to its ABL Facility to facilitate the Transactions, address
springing maturities associated with the 2025 Unsecured Notes and
allow for the approximately $49.9
million remaining aggregate principal amount of 2025
Unsecured Notes to be repaid with free cash flow, subject to
certain conditions. Additionally, SMLP will amend its Interest
Coverage Ratio ("ICR") covenant to 1.75x through year-end 2024 and
1.90x thereafter.
The 2026 Unsecured Notes will not be and have not been
registered under the Securities Act of 1933, as amended, and may
not be offered or sold in the United
States absent registration or an applicable exemption from
registration requirements.
This press release is neither an offer to sell nor the
solicitation of an offer to buy the 2026 Unsecured Notes or any
other securities and shall not constitute an offer, solicitation or
sale in any jurisdiction in which, or to any person to whom, such
an offer, solicitation or sale is unlawful.
Advisors
RBC Capital Markets, LLC acted as the lead financial advisor,
and Baker Botts L.L.P. acted as counsel, to Summit in connection
with the Transactions.
About Summit Midstream Partners, LP
SMLP is a value-driven limited partnership focused on
developing, owning and operating midstream energy infrastructure
assets that are strategically located in the core producing areas
of unconventional resource basins, primarily shale formations, in
the continental United States.
SMLP provides natural gas, crude oil and produced water gathering,
processing and transportation services pursuant to primarily
long-term, fee-based agreements with customers and counterparties
in five unconventional resource basins: (i) the Appalachian Basin,
which includes the Utica and
Marcellus shale formations in Ohio
and West Virginia; (ii) the
Williston Basin, which includes
the Bakken and Three Forks shale formations in North Dakota; (iii) the Denver-Julesburg
Basin, which includes the Niobrara
and Codell shale formations in Colorado and Wyoming; (iv) the Fort Worth Basin, which includes the Barnett
Shale formation in Texas; and (v)
the Piceance Basin, which includes the Mesaverde formation as well
as the Mancos and Niobrara shale formations in Colorado. SMLP has an equity method investment
in Double E Pipeline, LLC, which provides interstate natural gas
transportation service from multiple receipt points in the
Delaware Basin to various delivery
points in and around the Waha Hub in Texas. SMLP also has an equity method
investment in Ohio Gathering, which operates extensive natural gas
gathering and condensate stabilization infrastructure in the Utica
Shale in Ohio. SMLP is
headquartered in Houston,
Texas.
Forward-Looking Statements
This press release includes certain statements concerning
expectations for the future that are forward-looking within the
meaning of the federal securities laws. Forward-looking statements
include, without limitation, any statement that may project,
indicate or imply future results, events, performance or
achievements and may contain the words "expect," "intend," "plan,"
"anticipate," "estimate," "believe," "will be," "will continue,"
"will likely result," and similar expressions, or future
conditional verbs such as "may," "will," "should," "would," and
"could", including sources and uses of funding. In addition, any
statement concerning future financial performance (including future
revenues, earnings, growth rates, leverage, future refinancings or
strategic alternatives outcomes), ongoing business strategies and
possible actions taken by us or our subsidiaries are also
forward-looking statements. Forward-looking statements also contain
known and unknown risks and uncertainties (many of which are
difficult to predict and beyond management's control) that may
cause SMLP's actual results in future periods to differ materially
from anticipated or projected results. An extensive list of
specific material risks and uncertainties affecting SMLP is
contained in its 2022 Annual Report on Form 10-K filed with the
Securities and Exchange Commission (the "SEC") on March 1, 2023, as amended and updated from time
to time, including the Partnership's Quarterly Report on Form 10-Q
filed with the SEC on November 7,
2023. Any forward-looking statements in this press release
are made as of the date of this press release and SMLP undertakes
no obligation to update or revise any forward-looking statements to
reflect new information or events.
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SOURCE Summit Midstream Partners, LP