ONEOK, Inc. announced that it has entered into a $1.5 billion three-year unsecured term loan agreement that will be used for general corporate purposes, which may include repayment of existing indebtedness and funding of capital expenditures. This term loan was upsized to $1.5 billion from $1.25 billion as a result of strong demand.
“As we execute on our more than $6 billion of capital-growth projects announced and more under development, this term loan and our $2.5 billion credit facility, which supports our commercial paper program, enhances ONEOK’s liquidity,” said Terry K. Spencer, president and chief executive officer of ONEOK.
“This term loan along with our free cash flow generation, further strengthens our financial flexibility,” said Spencer. “The strong relationships we have with our banks and their continued support of our business and growth strategies are highlighted through the financial commitments received under this agreement.”
The term loan is unsecured and includes a floating interest rate calculated based on ONEOK’s credit rating, which is currently 112.5 basis points, or 1.125 percent, over the London Interbank Offered Rate (LIBOR). The loan includes a delayed draw feature that allows ONEOK the flexibility to draw on it for up to 180 days from Nov. 19, 2018. The loan is prepayable in whole or in part at any time without penalty and includes two, one-year extension options, subject to lender approval. The term loan contains substantially the same covenants as those contained in ONEOK’s existing revolving credit facility.
Mizuho Bank, Ltd. serves as the administrative agent for the term loan agreement.
ONEOK, Inc. (pronounced ONE-OAK) (NYSE: OKE) is a leading midstream service provider and owner of one of the nation’s premier natural gas liquids (NGL) systems, connecting NGL supply in the Mid-Continent, Permian and Rocky Mountain regions with key market centers and an extensive network of natural gas gathering, processing, storage and transportation assets.