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TPG Announces Public Offering of Senior Notes and Fixed-Rate Junior Subordinated Notes

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TPG Inc. announces intent to offer senior notes due 2034 and junior subordinated notes due 2064 in separate public offerings, with proceeds to repay debt and for general corporate purposes.
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The issuance of senior notes and junior subordinated notes by TPG Operating Group II, L.P., a subsidiary of TPG, represents a strategic financial maneuver aimed at restructuring the company's debt profile. The decision to repay portions of existing debt under the revolving credit facility and term loan using the proceeds from these offerings indicates a proactive approach to leverage management. This move is likely to be well-received by investors, as it may lead to improved credit ratings and reduced interest expenses, potentially enhancing shareholder value.

However, the introduction of junior subordinated notes, which are typically lower in the repayment hierarchy and carry higher risk, could indicate the company is willing to take on more risk for potentially lower borrowing costs. The market's reception of these notes will depend on the perceived stability and profitability of TPG, as well as the overall appetite for risk in the current economic climate. The underwriters' option to purchase additional junior subordinated notes to cover over-allotments suggests confidence in market demand but also introduces potential dilution effects.

From a debt capital markets perspective, TPG's concurrent offerings provide insight into the company's capital structure strategy. The use of an automatic shelf registration statement facilitates a more efficient and timely access to capital markets, suggesting that TPG is optimizing its financing strategy to take advantage of market conditions. The separation of the senior notes and junior subordinated notes into two distinct offerings allows investors to choose their preferred risk-reward profile, which could broaden the investor base and improve liquidity for the notes.

It's important to note that the structure of the guarantees provided by TPG and its subsidiaries will be closely scrutinized by investors, as it impacts the risk associated with the notes. The involvement of prominent financial institutions as joint book-running managers indicates strong support in the execution of these offerings, which could positively influence the pricing and subsequent trading performance of the notes.

Analyzing the broader market implications, the timing of TPG's offerings may be influenced by prevailing interest rate trends and investor sentiment towards corporate debt. In a low-interest-rate environment, the demand for higher-yielding corporate notes can be high, which TPG may be aiming to capitalize on. Conversely, if interest rates are rising, the company might be attempting to lock in lower rates before further increases.

The choice of book-running managers, including BofA Securities and Morgan Stanley, also plays a crucial role in the success of these offerings. Their expertise in pricing and distribution can significantly affect the demand and yield required by investors. The market will be observing the yield spread between the senior and junior subordinated notes, as this will reflect the market's perception of risk and the creditworthiness of TPG.

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, intends to offer senior notes due 2034 (the “senior notes”) and fixed-rate junior subordinated notes due 2064 (the “junior subordinated notes”) in separate registered public offerings, subject to market and other conditions. The senior notes and junior subordinated notes will each be fully and unconditionally guaranteed by TPG and certain of the Issuer’s direct subsidiaries. The Issuer intends to grant the underwriters of the junior subordinated notes a 30-day option to purchase additional junior subordinated notes solely to cover over-allotments, if any.

The Issuer intends to use the net proceeds from the concurrent offerings 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 senior notes offering. Morgan Stanley & Co. LLC, BofA Securities, Inc., UBS Securities LLC, Wells Fargo Securities, LLC and Goldman Sachs & Co. LLC are acting as joint book-running managers for the junior subordinated notes offering.

An automatic shelf registration statement (including a prospectus) relating to the concurrent offerings of the senior notes and junior subordinated notes was filed by TPG with the SEC on February 27, 2024 and became effective upon filing. The senior notes offering and junior subordinated notes 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 these 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 applicable prospectus supplement that the Company has filed with the SEC for more complete information about the Company and the concurrent offerings.

Copies of the prospectus and related prospectus supplement relating to senior notes offering and junior subordinated notes offering may be obtained from BofA Securities, Inc. at 201 North Tryon Street, NC1-022-02-25, Charlotte, NC 28255-0001, Attention: Prospectus Department, at dg.prospectus_requests@bofa.com or by telephone at 1-800-294-1322; or Morgan Stanley & Co. LLC, Attn: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014. A copy of the prospectus and the applicable related prospectus supplement relating to the concurrent offerings 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 proposed public offerings 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 presentation 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 type of notes is TPG offering in the public offerings?

TPG is offering senior notes due 2034 and fixed-rate junior subordinated notes due 2064.

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

The joint book-running managers for the senior notes offering are 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.

What will the net proceeds from the offerings be used for?

The net proceeds will be used to repay outstanding debt under the revolving credit facility and term loan, as well as for general corporate purposes.

When was the automatic shelf registration statement filed with the SEC?

The automatic shelf registration statement was filed on February 27, 2024, and became effective upon filing.

Are the senior notes and junior subordinated notes offerings contingent upon each other?

No, the offerings are being conducted separately, and neither is contingent upon the other.

TPG Inc.

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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.