Summit Midstream Partners, LP Announces Pricing of Upsized Offering of $575 Million of Senior Secured Second Lien Notes Due 2029

Rhea-AI Summary

Summit Midstream Partners, LP (NYSE: SMLP) has announced the pricing of an upsized offering of $575 million in 8.625% Senior Secured Second Lien Notes due 2029. The proceeds will be used to repurchase or redeem all of the Partnership's 8.500% Senior Secured Second Lien Notes due 2026 and 5.75% Senior Notes due 2025, pay accrued interest, and for general partnership purposes. The offering is expected to close around July 26, 2024.

The new notes will be guaranteed on a senior second-priority basis by the Partnership and certain subsidiaries, secured by the same collateral pledged for the ABL Facility. The notes are being offered only to qualified institutional buyers in the US and to persons outside the US in compliance with Regulation S under the Securities Act.

Positive

• Upsized offering of $575 million in new notes, potentially improving liquidity
• Refinancing of existing debt with new notes due in 2029, extending debt maturity

Negative

• Increased interest rate on new notes (8.625%) compared to existing 2025 notes (5.75%)
• Additional debt issuance may increase the company's leverage and financial risk

HOUSTON, July 17, 2024 /PRNewswire/ -- Summit Midstream Partners, LP (NYSE: SMLP) ("Summit," "SMLP" or the "Partnership") announced today that Summit Midstream Holdings, LLC, which is a subsidiary of the Partnership, priced an upsized offering (the "Offering") of $575 million in aggregate principal amount of new 8.625% Senior Secured Second Lien Notes due 2029 (the "New Notes"). The Partnership intends to use the net proceeds from the Offering, together with cash on hand and borrowings under the Partnership's asset-based lending credit facility (as amended and restated, the "ABL Facility") (i) to repurchase or redeem all of the Partnership's 8.500% Senior Secured Second Lien Notes due 2026 (the "2026 Secured Notes") and 5.75% Senior Notes due 2025 (the "2025 Notes"), (ii) to pay accrued and unpaid interest on the 2026 Secured Notes and the 2025 Notes and (iii) for general partnership purposes, including to pay fees and expenses associated with the Offering and the repurchase of the 2026 Secured Notes for cash, subject to certain conditions. The Offering is expected to close on or about July 26, 2024, subject to customary closing conditions.

It is expected that the New Notes will be guaranteed on a senior second-priority basis by the Partnership and certain of the Partnership's existing and future subsidiaries and will initially be secured on a second-priority basis by substantially the same collateral that is pledged for the benefit of the Partnership's lenders under the ABL Facility.

The New Notes and the related guarantees are being offered in the United States only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to persons outside the United States only in compliance with Regulation S under the Securities Act. The New Notes and the related guarantees have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any security, nor shall there be any sale of the New Notes and the related guarantees or any other security of the Partnership, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. This press release does not constitute a notice of redemption under the optional redemption provisions of the indenture governing the 2026 Secured Notes or the indenture governing the 2025 Notes.

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 four unconventional resource basins: (i) the Williston Basin, which includes the Bakken and Three Forks shale formations in North Dakota; (ii) the Denver-Julesburg Basin, which includes the Niobrara and Codell shale formations in Colorado and Wyoming; (iii) the Fort Worth Basin, which includes the Barnett Shale formation in Texas; and (iv) 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 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, but not limited to, statements regarding the expected closing of the Offering and the intended use of the net proceeds therefrom. In addition, any statement concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies and possible actions taken by SMLP or its 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 Annual Report on Form 10-K for the year ended December 31, 2023, which the Partnership filed with the Securities and Exchange Commission (the "SEC") on March 15, 2024, as amended and updated from time to time, including by the Partnership's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024, which the Partnership filed with the SEC on May 6, 2024, and by Exhibit 99.1 to the Partnership's Current Report on Form 8-K filed with the SEC on June 3, 2024. 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

FAQ

What is the size and interest rate of Summit Midstream Partners' new note offering?

Summit Midstream Partners (SMLP) has priced an upsized offering of $575 million in 8.625% Senior Secured Second Lien Notes due 2029.

When is the expected closing date for SMLP's new note offering?

The offering is expected to close on or about July 26, 2024, subject to customary closing conditions.

How will Summit Midstream Partners use the proceeds from the new notes?

SMLP will use the proceeds to repurchase or redeem existing notes due in 2025 and 2026, pay accrued interest, and for general partnership purposes, including fees and expenses associated with the offering.

Are Summit Midstream Partners' new notes registered under the Securities Act?

No, the new notes and related guarantees have not been registered under the Securities Act and are being offered only to qualified institutional buyers and non-US persons in compliance with applicable regulations.