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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): September 15, 2010
ENERGY TRANSFER EQUITY, L.P.
(Exact name of Registrant as specified in its charter)
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Delaware
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001-32740
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30-0108820 |
(State or other jurisdiction
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(Commission
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(IRS Employer |
of incorporation)
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File Number)
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Identification Number) |
3738 Oak Lawn
Dallas, Texas 75219
(Address of principal executive offices, including zip code)
(214) 981-0700
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement.
Revolving Credit Facility
On September 20, 2010, Energy Transfer Equity, L.P. (ETE) entered into a $200 million
five-year senior secured revolving credit facility (the Credit Agreement) with Credit Suisse AG,
as administrative agent and collateral agent, the other lenders party thereto and Credit Suisse
Securities (USA) LLC, as sole lead arranger and sole bookrunner. Borrowings under the Credit
Agreement mature on September 20, 2015 and are available for general business purposes.
Under the Credit Agreement, the obligations of ETE are secured by all tangible and intangible
assets of ETE and certain of its subsidiaries, including (i) the 50,226,967 common units of Energy
Transfer Partners, L.P. (ETP) held by ETE; (ii) ETEs 100% equity interest in the general partner
entities of ETP, through which ETE holds the incentive distribution rights in ETP; (iii) the
26,266,791 common units of Regency Energy Partners LP (Regency); (iv) ETEs 100% membership
interest in ETE GP Acquirer LLC (ETE Acquirer); and (v) ETE Acquirers 100% equity interest in
the general partner entities of Regency.
Borrowings under the revolving credit facility bear interest, at ETEs option, at either the
Eurodollar rate plus the applicable margin or the base rate plus the applicable margin. The
applicable margins are based upon ETEs leverage ratio and range from 2.75% to 3.75% for Eurodollar
loans and from 1.75% to 2.75% for base rate loans.
The Credit Agreement contains customary representations, warranties and covenants, including
financial covenants regarding a maximum leverage ratio, a maximum consolidated leverage ratio, a
minimum fixed charge coverage ratio and a minimum loan to value ratio. In addition, the Credit
Agreement contains customary events of default, including, but not limited to, (i) default for
failure to pay the principal on any Loan or any reimbursement obligation with respect to any letter
of credit when due and payable, (ii) failure to duly observe, perform or comply with certain
specified covenants, (iii) a representation or warranty made in connection with any loan document
proves to have been false or incorrect in any material respect on any date on or as of which made,
and (iv) the occurrence of a change of control.
In connection with the Credit Agreement, ETE and certain of its subsidiaries entered into a
Pledge and Security Agreement (the Security Agreement) with Credit Suisse AG, Cayman Islands
Branch, as collateral agent (the Collateral Agent). The Security Agreement secures all of ETEs
obligations under the Credit Agreement and grants to the Collateral Agent a continuing first
priority lien on, and security interest in, all of ETEs and the other grantors tangible and
intangible assets.
The foregoing description of the Credit Agreement and the Security Agreement does not purport
to be complete and is qualified in its entirety by reference to the full text of the Credit
Agreement and the Security Agreement, copies of which are filed herewith as Exhibit 10.1 and
Exhibit 10.2, respectively, and incorporated by reference herein.
7.500% Senior Notes due 2020
Underwriting Agreement
On September 15, 2010, ETE entered into an underwriting agreement (the Underwriting
Agreement) with Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. Incorporated, Wells Fargo
Securities, LLC, Banc of America Securities LLC, Citigroup Global Markets Inc. and UBS Securities
LLC, each acting on behalf of itself and collectively as the representatives of the several
underwriters, with respect to the public offering (the Offering) of $1,800,000,000 aggregate
principal amount of its 7.500% senior notes due 2020 (the Notes). The Offering was made pursuant
to ETEs Registration Statement on Form S-3 (File No. 333-164414) which became effective upon
filing with the Securities and Exchange Commission (the Commission) on January 20, 2010.
The Underwriting Agreement contains customary representations, warranties and agreements by
ETE, and customary conditions to closing, indemnification obligations of ETE and the underwriters,
including for liabilities under the Securities Act of 1933, other obligations of the parties 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 to
this Current Report on Form 8-K and is incorporated herein by reference.
Notes, Indenture and Supplemental Indenture
On September 20, 2010, ETE completed the Offering. ETE expects to receive net proceeds of
approximately $1.77 billion from the Offering, after deducting the underwriters discount and
estimated offering expenses, and intends to use approximately $142.1 million of the net proceeds to
repay all of the indebtedness outstanding under its existing $500 million revolving credit facility
and approximately $1.45 billion to repay all of the indebtedness outstanding under its term loan
facility. In addition, ETE intends to use approximately $168.6 million of the net proceeds to fund
the estimated cost to terminate interest rate swap agreements relating to those outstanding
borrowings and the remaining amount of net proceeds for general partnership purposes.
The terms of the Notes are governed by an Indenture dated September 20, 2010 (the Original
Indenture), as supplemented by the First Supplemental Indenture, dated September 20, 2010 (the
First Supplemental Indenture and, together with the Original Indenture, the Indenture), between
ETE and U.S. Bank National Association, as trustee (the Trustee).
Interest on the Notes is payable semi-annually on April 15 and October 15 of each year,
commencing April 15, 2011, and the Notes will mature on October 15, 2020. ETE may redeem some or
all of the Notes at any time at a price equal to 100% of the principal amount of the Notes plus a
make-whole premium and accrued and unpaid interest, if any, to the redemption date. Since the
indebtedness under our term loan facility was discharged concurrently with the closing of the
Offering, the Notes will be unsecured when issued. Additionally, the Notes initially will not be
guaranteed by an of ETEs subsidiaries. The Notes are ETEs senior obligations, ranking equally in
right of payment with our other existing and future unsubordinated debt and senior to any of its
future subordinated debt.
The Indenture contains customary events of default (each an Event of Default). Under the
Indenture, Events of Default include, but are not limited to, the following:
(1) default for 30 days in the payment when due of interest on the Notes;
(2) default in the payment of principal or premium, if any, on the Notes when due at their
stated maturity, upon redemption, upon declaration or otherwise;
(3) failure by ETE to comply with any of its agreements or covenants relating to merger,
consolidation or sale of assets, or in respect of its obligations to make or consummate a change of
control offer;
(4) failure by ETE to comply with its other covenants or agreements in the Indenture
applicable to the Notes for 60 days after written notice of default given by the Trustee or the
holders of at least 25% in aggregate principal amount of the outstanding Notes;
(5) default under any mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any indebtedness for money borrowed by ETE or any of its
subsidiaries (or the payment of which is guaranteed by ETE or any of its subsidiaries) whether the
indebtedness or guarantee now exists, or is created after the issue date of the Notes, if that
default both (A) is caused by a failure to pay principal of, or interest or premium, if any, on the
indebtedness prior to the expiration of the grace period provided in the indebtedness on the date
of the default (a Payment Default) and (B) results in the acceleration of the indebtedness prior
to its express maturity, and, in each case, the principal amount of any the indebtedness, together
with the principal amount of any other indebtedness under which there has been a Payment Default or
the maturity of which has been so accelerated, aggregates $25.0 million or more; and
(6) certain events of bankruptcy, insolvency or reorganization of ETE or any of its
significant subsidiaries or any group of ETEs subsidiaries that, taken together, would constitute
a significant subsidiary.
If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in
principal amount of the outstanding Notes may declare the principal of and accrued and unpaid
interest on all the Notes to be due and payable. Upon such a declaration, such principal and
accrued and unpaid interest on all of the Notes will be due and payable immediately. If an Event
of Default relating to certain events of bankruptcy, insolvency or reorganization with respect to
ETE occurs and is continuing, the principal of, and accrued and unpaid interest on the Notes
will become and be immediately due and payable without any declaration of acceleration, notice or
other
act on the part of the Trustee or any holders of the Notes. Under certain circumstances, the
holders of a majority in principal amount of the outstanding Notes may rescind any such
acceleration with respect to the Notes and its consequences.
The foregoing description of the Indenture does not purport to be complete and is qualified in
its entirety by reference to the full text of the Original Indenture and the Supplemental
Indenture, copies of which are filed herewith as Exhibit 4.1 and Exhibit 4.2, respectively, and
incorporated by reference herein.
Relationships
In the ordinary course of their respective businesses, the underwriters and their affiliates
have engaged, and may in the future engage, in commercial banking and/or investment banking
transactions with ETE and its affiliates for which they received or will receive customary fees and
expenses.
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Item 2.03. |
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Creation of a Direct Financial Obligation or an Obligation under Off-Balance Sheet
Arrangements of a Registrant. |
The
information provided in Item 1.01 is incorporated by
reference into this Item 2.03.
The foregoing description is qualified in its entirety by the exhibits incorporated by
reference herein.
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Item 9.01. |
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Financial Statements and Exhibits. |
(d) Exhibits.
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Exhibit Number |
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Description of the Exhibit |
1.1
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Underwriting Agreement dated as of September 15, 2010 among
Energy Transfer Equity, L.P. and Credit Suisse Securities (USA)
LLC, Morgan Stanley & Co. Incorporated, Wells Fargo Securities,
LLC, Banc of America Securities LLC, Citigroup Global Markets
Inc. and UBS Securities LLC, as representatives of the several
underwriters. |
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4.1
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Indenture dated September 20, 2010 between Energy Transfer
Equity, L.P. and U.S. Bank National Association, as trustee. |
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4.2
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First Supplemental Indenture dated September 20, 2010 between
Energy Transfer Equity, L.P. and U.S. Bank National Association,
as trustee (including form of the Notes). |
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5.1
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Opinion of Latham & Watkins LLP regarding legality of the Notes. |
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10.1
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Credit Agreement dated as of September 20, 2010 among Energy
Transfer Equity, L.P., Credit Suisse AG, as administrative agent
and collateral agent, the other lenders party thereto and Credit
Suisse Securities (USA) LLC, as sole lead arranger and sole
bookrunner. |
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10.2
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Pledge and Security Agreement dated September 20, 2010 among
Energy Transfer Equity, L.P., the other grantors named therein
and Credit Suisse AG, Cayman Islands Branch, as collateral
agent. |
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23.1
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Consent of Latham & Watkins LLP (included in Exhibit 5.1 hereto). |
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.
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Energy Transfer Equity, L.P.
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By: |
LE GP, LLC,
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its general partner |
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Date: September 20, 2010 |
By: |
/s/ John W. McReynolds
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John W. McReynolds |
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President and Chief Financial Officer |
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EXHIBIT INDEX
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Exhibit Number |
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Description of the Exhibit |
1.1
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Underwriting Agreement dated as of September 15, 2010 among
Energy Transfer Equity, L.P. and Credit Suisse Securities (USA)
LLC, Morgan Stanley & Co. Incorporated, Wells Fargo Securities,
LLC, Banc of America Securities LLC, Citigroup Global Markets
Inc. and UBS Securities LLC, as representatives of the several
underwriters. |
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4.1
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Indenture dated September 20, 2010 between Energy Transfer
Equity, L.P. and U.S. Bank National Association, as trustee. |
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4.2
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First Supplemental Indenture dated September 20, 2010 between
Energy Transfer Equity, L.P. and U.S. Bank National Association,
as trustee (including form of the Notes). |
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5.1
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Opinion of Latham & Watkins LLP regarding legality of the Units. |
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10.1
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Credit Agreement dated as of September 20, 2010 among Energy
Transfer Equity, L.P., Credit Suisse AG, as administrative agent
and collateral agent, the other lenders party thereto and Credit
Suisse Securities (USA) LLC, as sole lead arranger and sole
bookrunner. |
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10.2
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Pledge and Security Agreement dated September 20, 2010 among
Energy Transfer Equity, L.P., the other grantors named therein
and Credit Suisse AG, Cayman Islands Branch, as collateral
agent. |
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23.1
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Consent of Latham & Watkins LLP (included in Exhibit 5.1 hereto). |