Plains All American Pipeline, L.P. (Nasdaq: PAA) today announced that it and PAA Finance Corp., a wholly owned subsidiary of PAA, as co-issuer, have priced an underwritten public offering (the “Offering”) of $1 billion aggregate principal amount of 5.950% senior unsecured notes due 2035 at a price to the public of 99.761% of their face value. The Offering is expected to close on January 15, 2025, subject to the satisfaction of customary closing conditions.
PAA intends to use the net proceeds of approximately $988.1 million from the Offering to (i) fund the acquisition of all of the membership interests in Ironwood Midstream Energy Partners II, LLC for approximately $475 million (the “Ironwood Acquisition”), (ii) fund the repurchase of approximately 12.7 million Series A Preferred Units representing limited partner interests in PAA at par ($26.25 per unit), plus accrued and unpaid distributions (the “Preferred Unit Repurchase”), both of which were announced on January 7, 2025, and (iii) repay amounts outstanding under PAA’s credit facilities and commercial paper program, and, pending such uses, for general partnership purposes, which may include, among other things, intra-group lending and related transactions, repayment of indebtedness, acquisitions, capital expenditures and additions to working capital. If we do not complete the Ironwood Acquisition and/or the Preferred Unit Repurchase, we expect to use the net proceeds from the Offering for general partnership purposes as described above, including refinancing our 4.65% Senior Notes due October 2025.
The Offering is not conditioned on the consummation of either the Ironwood Acquisition or the Preferred Unit Repurchase. In addition, the consummation of the Offering is not a condition to the consummation of either the Ironwood Acquisition or the Preferred Unit Repurchase. No assurance can be given that the Ironwood Acquisition or the Preferred Unit Repurchase will ultimately be completed on the terms currently contemplated or at all.
J.P. Morgan Securities LLC, BMO Capital Markets Corp., Mizuho Securities USA LLC and Scotia Capital (USA) Inc. are acting as joint book-running managers for the Offering.
