Western Midstream Partners LP filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Other Events, Financial Statements and Exhibits
$WES
Natural Gas Distribution
Utilities
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 15, 2024
(Exact name of registrant as specified in its charter)
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Item 1.01 Entry Into a Material Definitive Agreement.
On August 20, 2024, Western Midstream Operating, LP (“WES Operating”), a subsidiary of Western Midstream Partners, LP (NYSE: WES) (“WES”), completed the public offering of $800,000,000 aggregate principal amount of 5.450% Senior Notes due 2034 (the “Notes”).
The terms of the Notes are governed by the Indenture, dated as of May 18, 2011 (the “Base Indenture”), by and among WES Operating, the subsidiary guarantors named therein and Computershare Trust Company, National Association (successor to Wells Fargo Bank, National Association), as trustee (the “Trustee”), as supplemented by the Fourteenth Supplemental Indenture (the “Supplemental Indenture”), dated as of August 20, 2024, by and between WES Operating and the Trustee, setting forth the specific terms applicable to the Notes (the Base Indenture, as supplemented by the Supplemental Indenture, the “Indenture”). Interest on the Notes will accrue from August 20, 2024, and will be payable semi-annually on May 15th and November 15th of each year, with the initial interest payment being due on May 15, 2025. The Notes will mature on November 15, 2034, unless redeemed prior to maturity.
WES Operating may redeem all or some of the Notes, in whole or in part, at any time prior to their maturity at the applicable redemption price as set forth in the Indenture. The Notes rank equally in right of payment with all of WES Operating’s existing and future senior indebtedness and senior to any subordinated indebtedness that WES Operating may incur.
The Indenture contains covenants that will limit the ability of WES Operating and certain of its subsidiaries to create liens on its principal properties, engage in sale and leaseback transactions, merge or consolidate with another entity or sell, lease or transfer substantially all of its properties or assets to another entity. Initially, the Notes will not be guaranteed by any of WES Operating’s subsidiaries. In the future, however, if any of WES Operating’s subsidiaries becomes a borrower or guarantor under, or grants any lien to secure any obligations pursuant to, WES Operating’s revolving credit facility, then that subsidiary will, jointly and severally, fully and unconditionally guarantee WES Operating’s payment obligations under the Notes so long as such subsidiary has any guarantee obligation under WES Operating’s revolving credit facility.
The Indenture also contains customary events of default, including, among other things, (i) default for 30 days in the payment when due of interest on the Notes; (ii) default in payment when due of principal of or premium, if any, on the Notes at maturity, upon redemption or otherwise; (iii) failure by WES Operating for 60 days after notice to comply with any of the other agreements in the Indenture; and (iv) certain events of bankruptcy or insolvency with respect to WES Operating. If an event of default occurs and is continuing with respect to the Notes, the Trustee or the holders of not less than 25% in principal amount of the outstanding Notes may declare the principal amount of such Notes and all accrued and unpaid interest to be due and payable. Upon such a declaration, such principal amount will become due and payable immediately. If an event of default relating to certain events of bankruptcy, insolvency or reorganization with respect to WES Operating occurs and is continuing, the principal amount of such Notes outstanding will become immediately due and payable without any declaration or other act on the part of the Trustee or any holders of such Notes.
Other material terms of the Notes, the Base Indenture and the Supplemental Indenture are described in the prospectus supplement relating to the Notes, dated August 15, 2024, as filed by WES Operating with the Securities and Exchange Commission on August 16, 2024. The foregoing description of the Supplemental Indenture is qualified in its entirety by reference to the full text of such Supplemental Indenture, a copy of which is filed herewith as Exhibit 4.1, and is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information regarding the Notes and the Indenture set forth in Item 1.01 of this report is incorporated by reference into this Item 2.03.
Item 8.01 Other Events.
On August 15, 2024, WES Operating, together with its general partner, Western Midstream Operating GP, LLC (the “WES Operating GP”), the sole member of WES Operating GP, WES, and the general partner of WES, Western Midstream Holdings, LLC, entered into an Underwriting Agreement (the “Underwriting Agreement”) with TD Securities (USA) LLC, BofA Securities, Inc., MUFG Securities Americas Inc. and PNC Capital Markets LLC, as representatives of the several underwriters, relating to the public offering (the “Offering”) of $800,000,000 aggregate principal amount of the Notes at a price to the public of 99.743% of their face value.
On August 20, 2024, WES Operating completed the Offering. WES Operating will use the net proceeds from the Offering to repay a portion of its maturing 3.100% Senior Notes due 2025 and 3.950% Senior Notes due 2025, and for general partnership purposes, including the funding of capital expenditures.
The Offering was made pursuant to WES Operating’s shelf registration statement on Form S-3 (File No. 333-270964-01), which became effective on March 30, 2023.
The Underwriting Agreement contains customary representations, warranties and agreements, conditions to closing, indemnification obligations, including for liabilities under the Securities Act of 1933, and termination provisions. The foregoing description of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Underwriting Agreement, which is filed as Exhibit 1.1 hereto and incorporated by reference herein.
Relationships
From time to time, certain of the underwriters and their related entities have engaged, and may in the future engage, in commercial and investment banking transactions with WES Operating in the ordinary course of their business. They have received, and expect to receive, customary compensation and expense reimbursement for these commercial and investment banking transactions.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number | Description | |||||||
| 1.1 | Underwriting Agreement, dated August 15, 2024, by and among Western Midstream Operating, LP, Western Midstream Partners, LP, Western Midstream Operating GP, LLC, Western Midstream Holdings, LLC and TD Securities (USA) LLC, BofA Securities, Inc., MUFG Securities Americas Inc. and PNC Capital Markets LLC. | |||||||
| 4.1 | ||||||||
| 4.2 | ||||||||
| 5.1 | ||||||||
| 23.1 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| WESTERN MIDSTREAM PARTNERS, LP | ||||||||||||||
| By: | Western Midstream Holdings, LLC, its general partner | |||||||||||||
| Dated: | August 20, 2024 | By: | /s/ Kristen S. Shults | |||||||||||
| Kristen S. Shults Senior Vice President and Chief Financial Officer | ||||||||||||||