Plains All American Pipeline LP has launched and priced an underwritten public offering of 800,000 of its 6.125% series B preferred units at $1,000 per unit.
The offering, expected to garner net proceeds of about $787.8 million, is scheduled to close on Oct. 10, according to an Oct. 4 news release. The partnership intends to use the net proceeds from the offering to repay indebtedness under its credit facilities and commercial paper program and for general partnership purposes, such as acquisitions and CapEx.
Distributions on the series B fixed-to-floating rate cumulative redeemable perpetual preferred units will be payable twice a year on the 15th of May and November up until Nov. 15, 2022. The distribution rate for the units from and including the date of original issue to, but not including, Nov. 15, 2022 will be 6.125% per annum of the $1,000 liquidation preference per unit or equal to $61.25 per unit per annum.
After Nov. 15, 2022, distribution on the units will be paid quarterly, on the 15th of February, May, August and November. Distributions on the units on and after Nov. 15, 2022, will accumulate at a percentage of the liquidation preference equal to an annual floating rate equal to the three-month London Interbank Offered Rate plus a spread of 4.11%.
The distributions will be payable to holders of record as of the close of business on the first business day of the month of the applicable distribution payment date.
J.P. Morgan Securities LLC, Merrill Lynch Pierce Fenner & Smith Inc., Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are acting joint book-running managers for the offering.