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Targa Resources Inks $1.5B High Yield Bond Offering

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Targa Resources Inks $1.5B High Yield Bond Offering

Targa Resources Partners has completed a $1.5 billion, evenly split, two-part offering of senior notes via lead Bank of America Merrill Lynch, sources said. The originally proposed 8.5-year bonds priced at the tight end of talk, while the 10-year maturity, which was added following strong investor demand and upsized by $250 million, priced at the middle of talk. The transaction ended a dry spell for U.S. high-yield issuance, which saw a print-free December 2018 due to an extended wave of market volatility.

Proceeds are earmarked for the full redemption of the issuer’s outstanding 4.125% notes due 2019, and for general partnership purposes, which may include repaying borrowings under its credit facilities or other debt, working capital, and funding growth investments and acquisitions. The issuer had last come to market in April 2018, when it placed $1 billion of 5.875% notes due 2026. Targa Resources Partners LP, a subsidiary of Targa Resources (NYSE: TRGP), owns, operates, acquires, and develops midstream energy assets in the U.S. – Jakema Lewis

Issuer Targa Resources Partners
Ratings BB/Ba3
Amount $750 million
Issue Senior (144A/ w. contingent reg. rights)
Coupon 6.5%
Price 100
Yield 6.5%
Spread T+381
Maturity July 15, 2027
Call non-call 3.5 (first call @ par 75% coupon)
Trade Jan. 10, 2019
Settle Jan. 17, 2019 (T+5)
Joint bookrunners BAML/JEFF/WF/CAPONE/GS/TD
Co-lead managers ABN/BBVA/ING/MUFG/Scotia/SMBC
Co-managers BB&T/BMO/CIBC/Citizens/FifthThird/USBank
Talk 6.625% area
Notes Make-whole  @ T+50; change of control put @ 101; up-to-35% equity claw @ 106.5 until Jan. 15, 2022
Issuer Targa Resources Partners
Ratings BB/Ba3
Amount $750 million
Issue Senior (144A/ w. contingent reg. rights)
Coupon 6.875%
Price 100
Yield 6.875%
Spread T+415
Maturity Jan. 15, 2029
Call non-call 5 (first call @ par +50% coupon)
Trade Jan. 10, 2019
Settle Jan. 17, 2019 (T+5)
Joint bookrunners BAML/JEFF/WF/CAPONE/GS/TD
Co-lead managers ABN/BBVA/ING/MUFG/Scotia/SMBC
Co-managers BB&T/BMO/CIBC/Citizens/FifthThird/USBank
Talk 6.875% area
Notes Upsized from $500 million; up-to-35% equity claw @ 106.875 until Jan. 15, 2022

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