Enable Midstream Partners Announces Preferred Equity Investment and Updated 2016 Expansion Capital Outlook
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CenterPoint Energy, Inc. agrees to purchase $363 million of preferred
equity
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2016 expansion capital outlook reduced to approximately $375 million
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Transactions will improve credit metrics, reduce equity needs and
eliminate a 2017 debt maturity
Enable Midstream Partners, LP (NYSE:ENBL) announced today that it has
signed a definitive agreement with CenterPoint Energy, Inc. (NYSE: CNP)
under which CenterPoint Energy, Inc. or one of its wholly owned
subsidiaries will purchase $363 million of 10% Series A
Fixed-to-Floating Non-Cumulative Redeemable Perpetual Preferred Units.
In addition, Enable will repay $363 million of notes scheduled to mature
in 2017 payable to a subsidiary of CenterPoint Energy Resources Corp.
These transactions were approved by Enable’s board of directors and the
Conflicts Committee of the board of directors, and are expected to close
prior to the end of the first quarter.
Enable also announced today an updated outlook for 2016 expansion
capital of approximately $375 million. This updated outlook is a
reduction of approximately 66 percent from the midpoint of Enable’s
previous 2016 expansion capital outlook. As part of this planned capital
reduction, Enable has delayed the in-service date for the 200 million
cubic feet per day Wildhorse Processing Plant until late 2017. Enable
will provide additional information on its 2016 outlook on its upcoming
fourth quarter 2015 earnings call on February 17, 2016.
“I believe these announcements are an effective response to today’s
challenging market conditions,” said Rod Sailor, President and Chief
Executive Officer. “These transactions combined with the reduction of
our 2016 expansion capital reduce the need to issue common equity in
this market and further strengthen Enable’s balance sheet, improving our
credit metrics and eliminating a 2017 debt maturity.”
PREFERRED TERMS
Distributions on the preferred units are non-cumulative and will be
payable quarterly from and including the date of original issue. The
initial distribution rate of 10.00% per annum of the stated liquidation
preference of $25.00 will change to an annual floating rate equal to the
three-month LIBOR plus a spread of 8.50% on and after the five-year
anniversary of the issuance of the preferred units. After the two-year
anniversary of the issuance of the preferred units, if the preferred
units are transferred to a non-affiliate of CenterPoint Energy, Inc.,
the distributions accumulate from the later of the date of transfer or
the second anniversary of the issuance of the preferred units.
The purchase of the preferred units is subject to the completion of
CenterPoint Energy, Inc.’s review of Enable’s audited financial
statements and Form 10-K for the year ended December 31, 2015, and
certain customary closing conditions.
ABOUT ENABLE MIDSTREAM PARTNERS
Enable owns, operates and develops strategically located natural gas and
crude oil infrastructure assets. Enable’s assets include approximately
12,300 miles of gathering pipelines, 13 major processing plants with
approximately 2.3 billion cubic feet per day of processing capacity,
approximately 7,900 miles of interstate pipelines (including Southeast
Supply Header, LLC of which Enable owns 50 percent), approximately 2,200
miles of intrastate pipelines and eight storage facilities comprising
87.5 billion cubic feet of storage capacity. For more information, visit
EnableMidstream.com.
The securities offered in the private placement have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), or
any state securities laws and may not be offered or sold in the United
States absent registration or an applicable exemption from registration
requirements of the Securities Act and applicable state laws.
This press release is neither an offer to sell nor a solicitation of an
offer to purchase the securities described herein.
FORWARD-LOOKING STATEMENTS
This press release may contain “forward-looking statements” within the
meaning of the securities laws. All statements, other than statements of
historical fact, regarding Enable Midstream Partners’ strategy, future
operations, financial position, estimated revenues, projected costs,
prospects, plans and objectives of management, including statements
regarding consummation of the purchase, repayment of indebtedness and
expansion capital spending, are forward-looking statements. These
statements often include the words “could,” “believe,” “anticipate,”
“intend,” “estimate,” “expect,” “project,” “forecast” and similar
expressions and are intended to identify forward-looking statements,
although not all forward-looking statements contain such identifying
words. These forward-looking statements are based on Enable Midstream’s
current expectations and assumptions about future events and are based
on currently available information as to the outcome and timing of
future events. Enable Midstream assumes no obligation to and does not
intend to update any forward-looking statements included herein. When
considering forward-looking statements, you should keep in mind the risk
factors and other cautionary statements described under the heading
“Risk Factors” included in our SEC filings. Enable Midstream cautions
you that these forward-looking statements are subject to all of the
risks and uncertainties, most of which are difficult to predict and many
of which are beyond its control, incident to the ownership, operation
and development of natural gas and crude oil infrastructure assets.
These risks include, but are not limited to, contract renewal risk,
commodity price risk, environmental risks, operating risks, regulatory
changes and the other risks described under “Risk Factors” in our SEC
filings. Should one or more of these risks or uncertainties occur, or
should underlying assumptions prove incorrect, Enable Midstream’s actual
results and plans could differ materially from those expressed in any
forward-looking statements.
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