SAN ANTONIO – August 22, 2016 - Howard Midstream Energy Partners, LLC (HEP) announced today that it has received binding commitments for the purchase of up to $500 million of Series B Preferred Units (Preferred Units) from the Alberta Investment Management Corporation (AIMCo), on behalf of certain of its clients.
AIMCo will initially purchase $300 million in Preferred Units, with a commitment to purchase an additional $200 million in Preferred Units in the future. The Preferred Units are subject to redemption and conversion features under certain circumstances. At its election, subject to certain limitations, HEP has the ability to make coupon payments on the Preferred Units in cash or in kind.
"We are excited to form this relationship with AIMCo and believe it is a testament to their belief in the long term strength of our company and its opportunities," said Scott Archer, Chief Financial Officer of Howard Energy Partners. "Combined with our current partners, Alinda Capital Partners and EnLink, this investment will allow us to continue to grow the partnership while prudently managing our capital structure and overall cost of capital."
"AIMCo is delighted to be partnering with HEP, its unitholders and HEP’s highly experienced management team,” states Ben Hawkins, Senior Vice President, Infrastructure & Timber of Alberta Investment Management Corporation. "The management team has an impressive track record at identifying, capturing and executing on market opportunities to create sustainable value for all of HEP’s stakeholders. We believe this investment is highly attractive and will help our clients in achieving their long term investment goals."
HEP expects to use the net proceeds of the private placement to repay outstanding indebtedness, fund capital projects and for general corporate purposes.
RBC Capital Markets and Tudor, Pickering, Holt & Co. served as financial advisors and Latham & Watkins LLP served as legal counsel to HEP.
Evercore served as financial advisor and Kirkland & Ellis LLP served as legal counsel to AIMCo.