| Item 2.03. | Creation of a Direct Financial Obligation under an Off-Balance Sheet Arrangement of a Registrant |
Senior Notes Indenture
On May 16, 2024, in connection with the closing of the previously announced offering (the “Notes Offering”) and issuance by Hess Midstream Operations LP, a Delaware limited partnership (the “Issuer”), and consolidated subsidiary of Hess Midstream LP, a Delaware limited partnership (the “Company”), of $600,000,000 in aggregate principal amount of its 6.500% senior notes due 2029 (the “Notes”), the Issuer entered into an indenture, dated as of May 16, 2024 (the “Indenture”), with Computershare Trust Company, N.A., as trustee (the “Trustee”) and the Guarantors (as defined below) party thereto. The Indenture contains customary terms, events of default and covenants relating to, among other things, the incurrence of debt, the payment of dividends or similar restricted payments, undertaking certain transactions with the Issuer’s affiliates, and limitations on asset sales.
The Notes will be fully and unconditionally guaranteed by all of the Issuer’s direct and indirect wholly owned subsidiaries that provide a guarantee under the Issuer’s senior secured revolving credit facility (together, the “Guarantors”).
The Notes were sold only to “qualified institutional buyers” in the United States pursuant to Rule 144A and outside the United States to non-U.S. Persons in compliance with Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). The Notes have not been and will not be registered under 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 the registration requirements of the Securities Act and applicable state laws.
At any time prior to June 1, 2026, the Issuer may redeem up to 40% of the aggregate principal amount of the Notes at a redemption price equal to 106.500% of the principal amount, plus accrued and unpaid interest, if any, to but not including the redemption date, with an amount of cash not greater than the net cash proceeds from certain equity offerings, subject to certain conditions. At any time prior to June 1, 2026, the Issuer may redeem the Notes in whole at any time or in part from time to time, at the Issuer’s option, at a redemption price equal to 100% of the principal amount of the Notes plus a “make-whole” premium plus accrued and unpaid interest, if any, to but not including the redemption date. The Issuer may also redeem all or a part of the Notes at any time on or after June 1, 2026, at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to but not including the redemption date. If the Issuer experiences a Change of Control Triggering Event (as defined in the Indenture), the Issuer will be required to offer to repurchase the Notes in cash at a price equal to 101% of the principal amount, plus accrued and unpaid interest, if any, to but not including the purchase date. There is no escrow account for, or security interest in, the proceeds of this offering for the benefit of the holders of the Notes.
The Notes rank equally in right of payment with all of the Issuer’s existing and future senior indebtedness and senior to all of the Issuer’s future subordinated indebtedness. The Notes are effectively subordinated in right of payment to all of the Issuer’s existing and future secured debt, including amounts outstanding under the Issuer’s Credit Facilities (as defined in the Indenture), to the extent of the value of the collateral securing such debt, and are structurally subordinated to the secured and unsecured debt (including trade payables) of the Issuer’s subsidiaries that do not guarantee the Notes.
The Issuer used the proceeds from the Notes Offering to repay borrowings under its revolving credit facility and any remaining net proceeds for general corporate purposes.
The above description of the Indenture does not purport to be complete and is qualified in its entirety by reference to the full text of the Indenture, a copy of which is being filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Relationships
The Company is managed and controlled by Hess Midstream GP LLC (“GP LLC”), a Delaware limited liability company and the general partner of Hess Midstream GP LP (“General Partner”), a Delaware limited partnership and the general partner of the Company. GP LLC is wholly owned by Hess Infrastructure Partners GP LLC (“HIP GP”), and HIP GP is owned 50% by Hess Investments North Dakota LLC (“HINDL”), a Delaware limited liability company, and 50% by GIP II Blue Holding, L.P. (“GIP”), a Delaware limited partnership. As a result, certain individuals, including officers and directors of Hess Corporation, HINDL, GIP, HIP GP and the General Partner, serve as officers and/or directors of more than one of such other entities.
