HOUSTON – Bracewell LLP represented Altus Midstream Company (Altus) and Altus Midstream LP (Altus Midstream) in connection with Altus Midstream’s entry into definitive agreements to issue $625 million of preferred equity in a private placement and amend its credit facility. This will allow its revolver capacity to increase to $650 million during the initial period (as defined in Altus Midstream’s credit agreement), an increase of $200 million.
The preferred equity will have a 7 percent per annum distribution rate, payable quarterly with a payment-in-kind option at Altus Midstream’s discretion for the first six quarters. The preferred equity will be redeemable at any time by Altus Midstream based on delivering the greater of: (i) an 11.5 percent internal rate of return and (ii) 1.3 times multiple of invested capital. Closing and funding of the preferred equity financing is expected to occur by June 28, 2019, subject to customary closing conditions.
Altus is a pure-play, Permian-to-Gulf Coast midstream C-corporation. Through its consolidated subsidiaries, Altus owns substantially all of the gas gathering, processing and transportation assets servicing Apache Corporation’s production in the Alpine High play in the Delaware Basin. Altus also owns, or has the option to own, joint venture equity interests in five Permian Basin pipelines, four of which go to various points along the Texas Gulf Coast.
Bracewell lawyers involved in the transaction included:
Partners: Troy L. Harder, Lytch Tornow Gutmann, G. Alan Rafte, Elizabeth L. McGinley, Steven J. Lorch, Jason M. Jean and Robin J. Miles
Associates: Kathy Witty Medford and Jay N. Larry