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TPG Announces Pricing of Senior Notes

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TPG Inc. announces a $600 million public offering of 5.875% senior notes due 2034 to repay debt and for general corporate purposes. The offering is set to close on March 5, 2024, with joint book-running managers including BofA Securities, Morgan Stanley, and Wells Fargo.
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The pricing of a registered public offering of $600 million in senior notes by TPG Operating Group II, L.P., a subsidiary of TPG Inc., is a significant event for the company and its investors. The 5.875% interest rate is indicative of the current cost of borrowing for the firm, which can be compared to the industry average to assess competitiveness. The use of proceeds to repay existing debt under the company's revolving credit facility and term loan suggests a strategic move to restructure the company's debt profile, potentially leading to a more favorable interest expense and improved cash flow management.

Investors and analysts will closely monitor the impact of this debt issuance on the company's leverage ratios and interest coverage metrics, as well as the potential effects on the company's credit rating. The involvement of a robust syndicate of book-running managers and co-managers, including major investment banks, could indicate strong market confidence in the offering and TPG's creditworthiness.

TPG's decision to issue senior notes may reflect broader market conditions and investor appetite for corporate debt. The fixed interest payments until 2034 provide investors with a predictable income stream, which may be particularly attractive in a volatile market environment. The semi-annual interest payments are a common feature of such financial instruments, providing a regular return to bondholders.

It's also important to consider the timing of the offering and its alignment with the company's strategic financial planning. The firm's ability to secure a relatively moderate interest rate amidst potentially fluctuating market interest rates could be advantageous. The diversification of funding sources, with both senior notes and a concurrent offering of junior subordinated notes, suggests a comprehensive approach to capital management.

The offering is being conducted under TPG's existing shelf registration statement with the SEC, which allows for a streamlined process and quicker access to the capital markets when needed. The shelf registration is a regulatory filing that permits an issuer to offer and sell securities to the public without a separate registration for each act of offering. It is crucial for compliance with securities laws and regulations.

The legal structure of the offering, with the notes being fully and unconditionally guaranteed by TPG and certain direct subsidiaries, is designed to provide assurance to investors regarding the repayment of the notes. This guarantee structure is a key legal aspect that underpins the creditworthiness of the debt issuance.

SAN FRANCISCO & FORT WORTH, Texas--(BUSINESS WIRE)-- TPG Inc. (“TPG” or the “Company”) (Nasdaq: TPG), a leading global alternative asset management firm, today announced that TPG Operating Group II, L.P. (the “Issuer”), an indirect subsidiary of TPG, priced a registered public offering of $600 million aggregate principal amount of 5.875% senior notes due 2034 (the “notes”). The notes will be fully and unconditionally guaranteed by TPG and certain of the Issuer’s direct subsidiaries. The offering is expected to close on March 5, 2024, subject to the satisfaction of customary closing conditions.

The notes will bear interest at a rate of 5.875% per year. Interest on the notes will be payable semi-annually in arrears on March 5 and September 5 of each year, beginning on September 5, 2024.

The Issuer intends to use the net proceeds from this offering, along with the net proceeds from its previously announced offering of fixed-rate junior subordinated notes to the extent completed (the “concurrent offering”), to repay all or a portion of outstanding debt under its revolving credit facility and term loan and for general corporate purposes.

BofA Securities, Inc., Morgan Stanley & Co. LLC, Wells Fargo Securities, LLC, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and TPG Capital BD, LLC are acting as joint book-running managers for the offering. Barclays Capital Inc., Citizens JMP Securities, LLC, Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., UBS Securities LLC, Loop Capital Markets LLC, TD Securities (USA) LLC, U.S. Bancorp Investments, Inc., Citigroup Global Markets Inc., SMBC Nikko Securities America, Inc., Academy Securities, Inc., Cabrera Capital Markets LLC, Siebert Williams Shank & Co., LLC and Stern Brothers & Co. are acting as co-managers for the offering.

The notes are being offered under the Company’s existing shelf registration statement filed with the Securities and Exchange Commission (the “SEC”) on February 27, 2024. The offering of the notes and the concurrent offering are being conducted as separate public offerings by means of separate prospectus supplements filed as part of the shelf registration statement, and neither of the offerings is contingent upon consummation of the other. Before you invest, you should read the prospectus in the shelf registration statement and the documents incorporated by reference therein and the prospectus supplement that the Company has filed with the SEC for more complete information about the Company and the offering.

Copies of the prospectus and related prospectus supplement related to the offering may be obtained from BofA Securities, Inc. toll-free at 1‑800-294-1322, Morgan Stanley & Co. LLC toll‑free at 1-866-718-1649, Wells Fargo Securities, LLC toll-free at 1-800-645-3751 (option #5), Goldman Sachs & Co. LLC toll-free at 1-866-471-2526 or J.P. Morgan Securities LLC at 1‑212-834-4533. A copy of the prospectus and the related prospectus supplement related to the offering may also be obtained free of charge by visiting EDGAR on the SEC’s website at www.sec.gov.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About TPG

TPG is a leading global alternative asset management firm, founded in San Francisco in 1992, with $222 billion of assets under management and investment and operational teams around the world. TPG invests across a broadly diversified set of strategies, including private equity, impact, credit, real estate, and market solutions, and our unique strategy is driven by collaboration, innovation and inclusion. Our teams combine deep product and sector experience with broad capabilities and expertise to develop differentiated insights and add value for our fund investors, portfolio companies, management teams, and communities.

Forward-Looking Statements

This press release may contain “forward-looking” statements based on the Company’s beliefs and assumptions and on information currently available to the Company. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods, or by the inclusion of forecasts or projections. Examples of forward-looking statements include, but are not limited to, statements we make regarding the terms of the notes offering and concurrent offering and the use of proceeds therefrom, the outlook for our future business and financial performance, estimated operational metrics, business strategy and plans and objectives of management for future operations, including, among other things, statements regarding expected growth, future capital expenditures, fund performance, dividends and dividend policy, and debt service obligations.

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by any forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the inability to recognize the anticipated benefits of the acquisition of Angelo Gordon; unexpected costs related to the integration of the Angelo Gordon business and operations; our ability to manage growth and execute our business plan; and regional, national or global political, economic, business, competitive, market and regulatory conditions, among various other risks discussed in the Company’s SEC filings.

For the reasons described above, we caution you against relying on any forward-looking statements, which should be read in conjunction with the other cautionary statements included elsewhere in this press release and risk factors discussed from time to time in the Company’s filings with the SEC, which can be found at the SEC’s website at http://www.sec.gov. Any forward-looking statement in this press release speaks only as of the date of this press release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to update or revise any forward-looking statement after the date of this press release, whether as a result of new information, future developments or otherwise, except as may be required by law. No recipient should, therefore, rely on these forward-looking statements as representing the views of the Company or its management as of any date subsequent to the date of the press release.

This press release does not constitute an offer of any TPG Fund.

Media

Luke Barrett

415-743-1550

media@tpg.com

Shareholders

Gary Stein

212-601-4750

shareholders@tpg.com

Source: TPG Inc.

FAQ

What is TPG Inc.'s recent public offering about?

TPG Inc. announced a $600 million public offering of 5.875% senior notes due 2034 to repay debt under its revolving credit facility and term loan and for general corporate purposes.

When is the expected closing date of the offering?

The offering is expected to close on March 5, 2024, subject to the satisfaction of customary closing conditions.

Who are the joint book-running managers for the offering?

BofA Securities, Morgan Stanley, Wells Fargo, Goldman Sachs, J.P. Morgan, and TPG Capital BD are acting as joint book-running managers for the offering.

What is the interest rate on the notes being offered?

The notes will bear interest at a rate of 5.875% per year, payable semi-annually in arrears on March 5 and September 5 of each year, starting from September 5, 2024.

How will the net proceeds from the offering be utilized?

The Issuer intends to use the net proceeds from the offering to repay all or a portion of outstanding debt under its revolving credit facility and term loan and for general corporate purposes.

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About TPG

TPG Inc., previously known as Texas Pacific Group, is an American investment company. The private equity firm is focused on leveraged buyouts and growth capital. TPG manages investment funds in growth capital, venture capital, public equity, and debt investments.