EQM Midstream floats price talk for $1.75B, 2-part bond offering

Price talk is circulating for EQM Midstream Partners LP's $1.75 billion, two-part senior unsecured notes offering with the included eight-year paper guided at 4.50%-4.75% and the 10-year tranche at 4.75%-5.00%, sources said. Books for the Barclays-led transaction will close today at 2:30 p.m. ET, with final terms expected thereafter, sources said.

BofA Securities and J.P. Morgan are also active bookrunners for the deal. The full bookrunner lineup includes Citigroup, Credit Suisse, Deutsche Bank, MUFG, PNC Capital Markets, Scotiabank, TD Securities and Wells Fargo.

The notes will be structured to be non-callable for life, according to market sources.

EQM Midstream Partners owns, operates, acquires and develops midstream assets in the Appalachian Basin. Proceeds of the notes will be used to repay its outstanding term loan A due 2022, to purchase up to $350 million of its outstanding bonds via tender offers and for general partnership purposes. The tender offers will target the company's existing 4.75% senior unsecured notes due 2023 and 4% senior unsecured notes due 2024, according to a company statement.

If the tender offers are not consummated or the proceeds of the notes exceed the amount needed to fund the offers, EQM said it intends to use any remaining funds to repay certain outstanding debt, including borrowings under its $3 billion credit facility, or to prefund capital expenditures and/or capital contributions to Mountain Valley Pipeline LLC.

EQM Midstream in June 2020 completed its last bond market tap, finalizing the tranches as $700 million of 6% senior unsecured notes due July 2025 and $900 million of 6.5% senior unsecured notes due July 2027.

Assigned issue ratings are BB-/Ba3/BB, same as the company's existing unsecured debt.