Energy Transfer Operating, L.P. Commences Exchange Offers for Senior Notes of Energy Transfer LP

DALLAS–(BUSINESS WIRE)–Energy Transfer Operating, L.P. (formerly, Energy Transfer Partners,
L.P., and a subsidiary of Energy Transfer LP) (“ETO”) today announced
that it has commenced offers to exchange (each, an “Exchange Offer” and,
collectively, the “Exchange Offers”) any and all validly tendered and
accepted senior notes of the series listed below issued by Energy
Transfer LP (formerly, Energy Transfer Equity, L.P.) (NYSE: ET) for new
senior notes to be issued by ETO as described in the table below (the
“New ETO Notes”). A Registration Statement on Form S-4 (the
“Registration Statement”) relating to the issuance of the New ETO Notes
was filed with the United States Securities and Exchange Commission (the
“SEC”) on February 25, 2019, but the SEC has not yet declared the
Registration Statement effective.

Title of Series of Existing ET
Notes/CUSIP Number(s)
(Collectively,
the “Existing ET

Notes”)

   

Aggregate
Principal Amount
Outstanding

    Series of New ETO Notes    

Exchange
Consideration(1)
(Principal
Amount
of New

ETO Notes)

   

Early Tender
Premium(1)
(Principal
Amount

of New ETO Notes)

   

Total Exchange
Consideration(2)
(Principal
Amount of New

ETO Notes)

7.500% Senior Notes due 2020 / 29273VAC4 $1,187,032,000 7.500% Notes due 2020 $970 $30 $1,000
4.250% Senior Notes due 2023 / 29273VAG5 $1,000,000,000 4.250% Notes due 2023 $970 $30 $1,000
5.875% Senior Notes due 2024 / 29273VAD2 / 29273VAE0 $1,150,000,000 5.875% Notes due 2024 $970 $30 $1,000
5.500% Senior Notes due 2027 / 29273VAF7 $1,000,000,000 5.500% Notes due 2027 $970 $30 $1,000
 
(1) For each $1,000 principal amount of Existing ET Notes accepted
for exchange.
(2) Includes Early Tender Premium (as defined herein).
 

In connection with the Exchange Offers, ETO is also soliciting consents
(each, a “Consent Solicitation” and, collectively, the “Consent
Solicitations” and, together with the Exchange Offers, the “Exchange
Offers and Consent Solicitations”) from holders of the Existing ET Notes
to amend (the “Proposed Amendments”) the indentures governing the
Existing ET Notes (the “ET Indentures”), upon the terms and subject to
the conditions set forth in the Prospectus (as defined below), to
eliminate certain of the covenants, restrictive provisions and events of
default included therein. If the Proposed Amendments are adopted, the
Existing ET Notes will be governed by the ET Indentures, as amended by
the Proposed Amendments, which will have less restrictive terms and
afford reduced protections to the holders of those securities compared
to those terms and protections currently in the ET Indentures or
applicable to the New ETO Notes. In order for the Proposed Amendments to
the ET Indentures to be adopted, holders of at least a majority of the
aggregate principal amount of the Existing ET Notes outstanding must
consent to them, and those consents must be received and not withdrawn
prior to the Expiration Deadline (as defined below).

In exchange for each $1,000 principal amount of Existing ET Notes that
is validly tendered at or prior to 5:00 p.m., New York City time, on
March 8, 2019, unless extended (such date and time with respect to an
Exchange Offer and Consent Solicitation, as the same may be extended for
such Exchange Offer and Consent Solicitation, the “Early Tender
Deadline”), and not validly withdrawn, holders of Existing ET Notes will
be eligible to receive the applicable total exchange consideration set
out in the table above (the “Total Exchange Consideration”), which
includes the applicable early tender premium set out in such table (the
“Early Tender Premium”). In exchange for each $1,000 principal amount of
Existing ET Notes validly tendered after the Early Tender Deadline but
prior to 11:59 p.m., New York City time, on March 22, 2019, unless
extended (such date and time with respect to an Exchange Offer and
Consent Solicitation, as the same may be extended for such Exchange
Offer and Consent Solicitation, the “Expiration Deadline”), and not
validly withdrawn, holders of Existing ET Notes will be eligible to
receive only the applicable exchange consideration set out in such table
(the “Exchange Consideration”).

Each series of New ETO Notes will accrue interest from the most recent
date on which interest has been paid on the corresponding series of
Existing ET Notes accepted in the Exchange Offer and Consent
Solicitation for such series of New ETO Notes; provided, that interest
will accrue only with respect to the aggregate principal amount of New
ETO Notes a holder receives, which will be less than the principal
amount of Existing ET Notes tendered for exchange if such holder tenders
its Existing ET Notes after the Early Tender Deadline. If, pursuant to
the Exchange Offers, a tendering holder of Existing ET Notes would
otherwise be entitled to receive a principal amount of any series of New
ETO Notes that is not equal to $2,000 or an integral multiple of $1,000
in excess thereof, such principal amount will be rounded down to the
nearest $2,000 or integral multiple of $1,000 in excess thereof, and
such holder of Existing ET Notes will receive pursuant to the Exchange
Offers the rounded principal amount of New ETO Notes plus cash equal to
the sum of the principal amount of New ETO Notes not received as a
result of rounding down plus accrued and unpaid interest thereon at the
rate of the applicable Existing ET Notes to the settlement date. Except
as set forth above, no accrued but unpaid interest will be paid with
respect to Existing ET Notes tendered for exchange. The New ETO Notes
will be senior unsecured obligations of ETO and will rank equally in
right of payment with all of its existing and future senior unsecured
debt, including debt under ETO’s revolving credit facility, its existing
senior notes and the senior notes of its subsidiary, Sunoco Logistics
Partners Operations L.P. (“SXL Opco”). The New ETO Notes will be fully
and unconditionally guaranteed by SXL Opco for as long as it guarantees
any of ETO’s other long-term debt.

Each Exchange Offer and Consent Solicitation is subject to a number of
conditions, including the effectiveness of the Registration Statement,
the valid receipt of the requisite consents and the completion of each
of the other Exchange Offers and Consent Solicitations, unless otherwise
waived by ETO.

The Dealer Managers for the Exchange Offers and the Solicitation Agents
for the Consent Solicitations are:

Citigroup       J.P. Morgan       TD Securities

388 Greenwich Street, 7th Floor

J.P. Morgan Securities LLC

TD Securities (USA) LLC

New York, New York 10013

383 Madison Avenue

31 West 52nd Street

Attn: Liability Management Group

New York, New York 10179

New York, New York 10019

Collect: (212) 723-6106

Attention: Liability Management Group

Attn: Liability Management Group

Toll-Free: (800) 558-3745

Collect: (212) 834-3424

Toll-Free: (855) 495-9846

Toll-Free: (866) 834-4666

 

The Information Agent and Exchange Agent for the Exchange Offers and
Consent Solicitations is:

Global Bondholder Services Corporation

65 Broadway, Suite 404

New York, New York 10006

Banks and Brokers Call Collect: (212) 430-3774

All Others Call Toll-Free: (866) 924-2200

 

The Exchange Offers and Consent Solicitations are being made upon the
terms and subject to the conditions set forth in ETO’s preliminary
prospectus, dated as of February 25, 2019 (the “Prospectus”), which
forms a part of the Registration Statement. Tenders of Existing ET Notes
may be validly withdrawn (and the related consents to the Proposed
Amendments revoked as a result) at any time before the Expiration
Deadline. Following the Expiration Deadline, tenders of Existing ET
Notes may not be validly withdrawn unless ETO is required by law to
permit withdrawal. In the event of termination of the Exchange Offers,
the Existing ET Notes tendered will be promptly returned to the
tendering holders. Consents to the applicable Proposed Amendments may
only be revoked by validly withdrawing the tendered Existing ET Notes
prior to the Early Tender Deadline, but may not be revoked after the
Early Tender Deadline even if holders validly withdraw tenders of any
particular series of Existing ET Notes. Requests for documents may be
directed to the Information Agent at the address and telephone numbers
provided above.

This press release shall not constitute an offer to sell, or a
solicitation of an offer to buy, any of the securities described herein
and is also not a solicitation of the related consents. The Exchange
Offers may be made only pursuant to the terms of the Prospectus and the
other related materials. A Registration Statement relating to the New
ETO Notes has been filed with the SEC but has not yet become effective.
The New ETO Notes may not be sold, nor may offers to buy be accepted,
prior to the time the Registration Statement is declared effective by
the SEC.

Energy Transfer Operating, L.P. owns and operates one of the
largest and most diversified portfolios of energy assets in the United
States. Strategically positioned in all of the major U.S. production
basins, its core operations include complementary natural gas midstream,
intrastate and interstate transportation and storage assets; crude oil,
natural gas liquids (NGL) and refined product transportation and
terminalling assets; NGL fractionation; and various acquisition and
marketing assets. Energy Transfer Operating, L.P.’s general partner is
owned by Energy Transfer LP (NYSE: ET).

Energy Transfer LP (NYSE: ET) owns and operates one of the
largest and most diversified portfolios of energy assets in the United
States, with a strategic footprint in all of the major U.S. production
basins, ET is a publicly traded limited partnership with core operations
that include complementary natural gas midstream, intrastate and
interstate transportation and storage assets; crude oil, natural gas
liquids (NGL) and refined product transportation and terminalling
assets; NGL fractionation; and various acquisition and marketing assets.
ET, through its ownership of Energy Transfer Operating, L.P., formerly
known as Energy Transfer Partners, L.P., also owns the general partner
interests, the incentive distribution rights and 28.5 million common
units of Sunoco LP (NYSE: SUN), and the general partner interests and
39.7 million common units of USA Compression Partners, LP (NYSE: USAC).

Forward-Looking Statements

Statements about the Exchange Offers and Consent Solicitations may be
forward-looking statements. Forward-looking statements can be identified
by words such as “anticipates,” “believes,” “intends,” “projects,”
“plans,” “expects,” “continues,” “estimates,” “goals,” “forecasts,”
“may,” “will” and other similar expressions. These forward-looking
statements rely on a number of assumptions concerning future events and
are subject to a number of uncertainties and factors, many of which are
outside the control of ETO, and a variety of risks that could cause
results to differ materially from those expected by management of ETO.
Important information about issues that could cause actual results to
differ materially from those expected by management of ETO can be found
in ETO’s public periodic filings with the SEC, including its Annual
Report on Form 10-K. ETO undertakes no obligation to update or revise
forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating
results over time.

Contacts

Energy Transfer Operating, L.P.
Investor Relations:
William
Baerg, Brent Ratliff, Lyndsay Hannah, 214-981-0795
or
Media
Relations:
Vicki Granado and Lisa Dillinger, 214-840-5820

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