Obbligazione Buckeye Associates 4.35% ( US118230AN13 ) in USD

Buckeye Associates

96.52 USD ▼

Stati Uniti

US118230AN13 ( in USD )

4.35% per anno ( pagato 2 volte l'anno)

14/10/2024 - Obbligazione è scaduto

Prospetto opuscolo dell'obbligazione Buckeye Partners US118230AN13 in USD 4.35%, scaduta

118230AN1

BB- ( Non-investment grade speculative )

B1 ( Highly speculative )

Buckeye Partners è una società americana di trasporto e stoccaggio di prodotti energetici, con un'ampia rete di oleodotti, terminali e altri impianti negli Stati Uniti.

The Obbligazione issued by Buckeye Associates ( United States ) , in USD, with the ISIN code US118230AN13, pays a coupon of 4.35% per year.
The coupons are paid 2 times per year and the Obbligazione maturity is 14/10/2024

The Obbligazione issued by Buckeye Associates ( United States ) , in USD, with the ISIN code US118230AN13, was rated B1 ( Highly speculative ) by Moody's credit rating agency.

The Obbligazione issued by Buckeye Associates ( United States ) , in USD, with the ISIN code US118230AN13, was rated BB- ( Non-investment grade speculative ) by Standard & Poor's ( S&P ) credit rating agency.

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Table of Contents
TABLE OF CONTENTS
CALCU LAT I ON OF REGI ST RAT I ON FEE
Propose d M a x im um
T it le of Ea c h Cla ss of
Aggre ga t e Offe ring
Am ount of
Se c urit ie s T o Be Re gist e re d

Pric e
Re gist ra t ion Fe e (1 )
Debt Securities
$
600,000,000 $
77,280

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(1) The filing fee, calculated in accordance with Rule 457(r), has been transmitted to the SEC in connection with the
securities offered from Registration Statement File No. 333-178097 by means of this prospectus supplement.
Table of Contents
File d Pursua nt t o Rule 4 2 4 (b)(2 )
Re gist ra t ion N o. 3 3 3 -1 7 8 0 9 7
Prospe c t us supple m e nt
(To Prospectus dated November 21, 2011)
$600,000,000
Buc k e ye Pa rt ne rs, L.P.
4.35% Notes due 2024
5.60% Notes due 2044
We are offering $300.0 million of our 4.35% notes due 2024 (the "2024 Notes") and $300.0 million of our 5.60% notes due 2044 (the
"2044 Notes," and together with the 2024 Notes, the "Notes"). We will pay interest on the Notes on April 15 and October 15 of each
year, commencing on April 15, 2015. The 2024 Notes will mature on October 15, 2024 and the 2044 Notes will mature on October 15,
2044 unless, in each case, redeemed prior to maturity. The Notes will be issued only in denominations of $1,000 and integral multiples
of $1,000.
We intend to use the net proceeds from this offering (i) to fund a portion of the purchase price of the South Texas Transaction (as
defined herein) and related expenses, (ii) to fund the redemption of all $275.0 million aggregate principal amount of our outstanding
5.300% Notes due October 15, 2014 and (iii) for general partnership purposes. If the pending South Texas Transaction is not
consummated, or the Contribution Agreement (as defined herein) is terminated, in each case, on or prior to March 1, 2015, we will be
required to redeem all of the 2024 Notes then outstanding at 101% of their initial offering price, plus accrued and unpaid interest to the
date of redemption. See "Description of the Notes--Special Mandatory Redemption."
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We have the option to redeem the Notes, in whole or in part, at any time or from time to time, prior to their maturity at the applicable
redemption price described in this prospectus supplement. See "Description of Notes--Optional Redemption."
The Notes will be our senior unsecured obligations, will rank equally in right of payment with all of our existing and future unsecured
unsubordinated debt and will rank senior in right of payment to all of our existing and future unsecured subordinated debt. The Notes
will be effectively junior to all existing and future debt and other liabilities of our subsidiaries, including our operating subsidiaries.
Each of the 2024 Notes and 2044 Notes are a new issue of securities with no established trading market. We do not intend to apply for
listing of the Notes on any securities exchange or for inclusion of the Notes in any automated quotation system.
I nve st ing in t he N ot e s involve s risk s. Se e "Risk Fa c t ors" be ginning on pa ge S -7 .

Pe r
Pe r
2 0 2 4
T ot a l
2 0 4 4
T ot a l

N ot e
2 0 2 4 N ot e s
N ot e
2 0 4 4 N ot e s

Price to the public(1)

99.825%$299,475,000
99.876%$299,628,000
Underwriting discounts and commissions

0.650%$
1,950,000
0.875%$
2,625,000
Proceeds to Buckeye Partners, L.P. (before
expenses)(1)

99.175%$297,525,000
99.001%$297,003,000

(1) Plus accrued interest from September 12, 2014, if settlement occurs after that date.
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or
passed upon the accuracy or the adequacy of this prospectus supplement or the accompanying base prospectus. Any representation to
the contrary is a criminal offense.
The Notes will be ready for delivery in book-entry form only through the facilities of The Depository Trust Company for the accounts of
its participants, including Euroclear Bank S.A./N.V., as operator of the Euroclear System and Clearstream Banking, société anonyme,
on or about September 12, 2014.
Joint Book-Running Managers
J .P. M orga n

M orga n St a nle y
SunT rust Robinson H um phre y We lls Fa rgo Se c urit ie s

Ba rc la ys

BN P PARI BAS
De ut sc he Ba nk Se c urit ie s RBC Ca pit a l M a rk e t s
Co-Managers
BB& T Ca pit a l M a rk e t s
PNC Capital Markets LLC
SM BC N ik k o

U BS I nve st m e nt Ba nk

Prospectus supplement dated September 9, 2014
Table of Contents
T a ble of Cont e nt s
Prospe c t us Supple m e nt

Pa ge
Risk Factors

S-7
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Use of Proceeds

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Capitalization

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Description of Notes

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Description of Other Indebtedness

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United States Federal Income Tax Considerations

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Underwriting

S-36
Legal Matters

S-40
Experts

S-40
Forward-Looking Statements

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Where You Can Find More Information

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Ba se Prospe c t us

Pa ge
About this Prospectus

1
Buckeye Partners, L.P.

1
Where You Can Find More Information

1
Information We Incorporate by Reference

2
Risk Factors

3
Forward-Looking Statements

4
Ratio of Earnings to Fixed Charges

5
Use of Proceeds

6
Description of Limited Partnership Units

7
How We Make Cash Distributions

8
The Partnership Agreement

9
Description of Debt Securities

18
Material Tax Consequences

29
Legal Matters

44
Experts

44
T his doc um e nt is in t w o pa rt s. T he first pa rt is t he prospe c t us supple m e nt , w hic h de sc ribe s our busine ss a nd
t he spe c ific t e rm s of t his offe ring. T he se c ond pa rt is t he a c c om pa nying ba se prospe c t us, w hic h give s m ore
ge ne ra l inform a t ion, som e of w hic h m a y not a pply t o t his offe ring. Ge ne ra lly, w he n w e re fe r only t o t he
"prospe c t us," w e a re re fe rring t o bot h pa rt s c om bine d. I f inform a t ion in t his prospe c t us supple m e nt c onflic t s
w it h inform a t ion in t he a c c om pa nying ba se prospe c t us, you should re ly on t he inform a t ion in t his prospe c t us
supple m e nt .
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Y ou should re ly only on t he inform a t ion c ont a ine d in or inc orpora t e d by re fe re nc e in t his prospe c t us
supple m e nt , t he a c c om pa nying ba se prospe c t us a nd a ny fre e w rit ing prospe c t us pre pa re d by us or on our
be ha lf. We ha ve not , a nd t he unde rw rit e rs ha ve not , a ut horize d a nyone t o provide you w it h diffe re nt
inform a t ion. We a re not , a nd t he unde rw rit e rs a re not , m a k ing a n offe r of t he N ot e s in a ny jurisdic t ion w he re
t he offe r is not pe rm it t e d. Y ou should not a ssum e t ha t t he inform a t ion c ont a ine d in t his prospe c t us
supple m e nt , t he a c c om pa nying ba se prospe c t us or t he inform a t ion w e ha ve pre viously file d w it h t he Se c urit ie s
a nd Ex c ha nge Com m ission t ha t is inc orpora t e d by re fe re nc e he re in is a c c ura t e a s of a ny da t e ot he r t ha n it s
re spe c t ive da t e . Our busine ss, fina nc ia l c ondit ion, re sult s of ope ra t ions a nd prospe c t s m a y ha ve c ha nge d sinc e
t hose re spe c t ive da t e s.
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Sum m a ry
You should carefully read this entire prospectus supplement, the accompanying base prospectus and the documents incorporated by
reference herein and therein to understand fully the terms of the Notes, as well as the tax and other considerations that are important in
making your investment decision.
For purposes of this prospectus supplement and the accompanying base prospectus, unless otherwise indicated, the terms "us," "we,"
"our," the "Partnership" and similar terms refer to Buckeye Partners, L.P., together with our subsidiaries.
Buc k e ye Pa rt ne rs, L.P.
About t he Pa rt ne rship
We are a publicly traded master limited partnership that owns and operates a diversified network of integrated assets providing
midstream logistic solutions, primarily consisting of the transportation, storage, and marketing of liquid petroleum products. We are one
of the largest independent liquid petroleum products pipeline operators in the United States in terms of volumes delivered with
approximately 6,000 miles of pipeline and more than 120 liquid petroleum products terminals with aggregate storage capacity of over
110 million barrels across our portfolio of pipelines, inland terminals, and an integrated network of marine terminals located primarily on
the U.S. East Coast and in the Caribbean. Our flagship marine terminal in The Bahamas is one of the largest marine crude oil and
petroleum products storage facilities in the world and provides an array of logistics and blending services for the global flow of
petroleum products. Our network of marine terminals enables us to facilitate global flows of crude oil, refined petroleum products, and
other commodities and to offer our customers connectivity to some of the world's most important bulk storage and blending hubs. We
are also a wholesale distributor of refined petroleum products in areas served by our pipelines and terminals. Finally, we also operate or
maintain third-party pipelines under agreements with major oil and gas, petrochemical and chemical companies and perform certain
engineering and construction management services for third parties.
Re c e nt De ve lopm e nt s
2014 Transactions
Execution of Purchase and Sale Agreement to Dispose of Lodi Gas Storage, L.L.C.
In July 2014, we signed a purchase and sale agreement to sell all of the outstanding limited liability company interests in Lodi Gas
Storage, L.L.C. ("Lodi") to Brookfield Infrastructure and its institutional partners for $105 million. Lodi owns a natural gas storage facility
in Northern California. The transaction is expected to close in the fourth quarter of 2014 or the first quarter of 2015, subject to approval
by the California Public Utilities Commission, as well as customary and other closing conditions.
Execution of Contribution Agreement with Trafigura Corpus Christi Holdings Inc.
On September 2, 2014, we signed a definitive agreement (the "Contribution Agreement") with Trafigura Corpus Christi Holdings Inc.
("Trafigura") to acquire an 80% membership interest in the entity that owns Trafigura Terminals LLC ("TTL") for $860.0 million (the
"South Texas

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Transaction"). At the closing of the South Texas Transaction, we expect to enter into seven- to ten-year commercial agreements with
Trafigura AG or its affiliates pursuant to which TTL and its subsidiaries will provide fee-based storage, throughput, terminalling,
dockage, wharfage and fractionation services to Trafigura AG or its affiliates. The assets owned by TTL and its subsidiaries primarily
consist of (1) a deep-water, high volume marine terminal located in the Corpus Christi ship channel capable of handling a broad array of
petroleum products, including crude condensate, liquefied petroleum gas, naphtha and distillates, (2) a condensate splitter and
petroleum products storage complex, also located near the Corpus Christi Ship Channel, and (3) three crude oil and condensate
gathering facilities in the Eagle Ford shale. The purchase price is subject to customary adjustments at closing, including for working
capital and recently made capital expenditures. This acquisition, which is subject to regulatory approvals and customary closing
conditions, is expected to close in mid- to late-September 2014.
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Equity Offerings
On August 15, 2014, we completed a public offering of 2,600,000 limited partnership units representing limited partner interests in the
Partnership ("LP Units") pursuant to an effective shelf registration statement, which priced at $76.60 per unit (the "August Equity
Offering"). The underwriter also exercised an option to purchase 390,000 additional LP units, resulting in total gross proceeds of
approximately $229.0 million before deducting underwriting fees and estimated offering expenses of approximately $2.6 million. We used
the net proceeds from the August Equity Offering to reduce the indebtedness outstanding under our revolving credit facility and for
general partnership purposes.
On September 9, 2014, we expect to complete a public offering of 6,750,000 LP Units pursuant to an effective shelf registration
statement, which priced at $80.00 per unit (the "September Equity Offering"), resulting in total gross proceeds of approximately
$540.0 million before deducting underwriting fees and estimated offering expenses of approximately $19.2 million. We intend to use the
net proceeds from the September Equity Offering to fund a portion of the purchase price of the South Texas Transaction and for
general partnership purposes.
Busine ss St ra t e gy
Our primary business objective is to provide stable and sustainable cash distributions to our LP unitholders, while maintaining a
relatively low investment risk profile. The key elements of our strategy are to:
·
Operate in a safe and environmentally responsible manner;
·
Maximize utilization of our assets at the lowest cost per unit;
·
Maintain stable long-term customer relationships;
·
Optimize, expand and diversify our portfolio of energy assets through accretive acquisitions and organic growth projects; and
·
Maintain a solid, conservative financial position and an investment-grade credit rating.
We intend to achieve our strategy by:
·
Acquiring, building and operating high quality, strategically-located assets;

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·
Maintaining and enhancing the integrity of our pipelines, terminals and storage assets;
·
Pursuing strategic cash flow-accretive acquisitions that:
·
Complement our existing footprint;
·
Provide geographic, product and/or asset class diversity; and
·
Leverage existing management capabilities and infrastructure;
·
Pursuing other energy-related assets that enable us to leverage our asset base, knowledge base and skill sets; and
·
Providing superior customer service.
Ex e c ut ive Offic e s
Our principal executive offices are located at One Greenway Plaza, Suite 600, Houston, Texas 77046, and our telephone number is
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(832) 615-8600.

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T he Offe ring
I ssue r
Buckeye Partners, L.P.
Se c urit ie s

offe re d
We are offering $600.0 million aggregate principal amount of notes of the following series:

· $300.0 million of our 4.35% notes due 2024; and

· $300.0 million of our 5.60% notes due 2044.
I nt e re st

pa ym e nt
da t e s
Interest will be payable semi-annually in arrears on April 15 and October 15 of each year, beginning on April 15, 2015.
M a t urit y
Unless redeemed prior to maturity, the 2024 Notes will mature on October 15, 2024, and the 2044 Notes will mature
da t e
on October 15, 2044.
Ra nk ing
The Notes will be:

· our senior unsecured obligations, ranking equally in right of payment with all of our existing and future unsecured
unsubordinated debt;

· non-recourse to our general partner;

· senior in right of payment to all of our existing and future unsecured subordinated debt;

· effectively junior to any of our existing and future secured debt to the extent of the collateral securing such debt; and

· effectively junior to all existing and future debt and other liabilities of our subsidiaries, including our operating
subsidiaries.
Cove na nt s The Notes will be issued under an indenture with U.S. Bank National Association (successor to SunTrust Bank), as
trustee, which contains covenants for your benefit. These covenants restrict our ability, with certain exceptions, to:

· incur debt secured by liens;

· engage in sale/leaseback transactions; or

· merge or consolidate with another entity or sell substantially all of our assets to another entity.

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U se of
We estimate that we will receive net proceeds from this offering of approximately $593.8 million (after deducting the
proc e e ds
underwriting discount and estimated offering expenses payable by us). We intend to use the net proceeds from this
offering (i) to fund a portion of the purchase price of the South Texas Transaction and related expenses, (ii) to fund the
redemption of all $275.0 million aggregate principal amount of our outstanding 5.300% Notes due October 15, 2014 and
(iii) for general partnership purposes, including the settlement of existing interest rate swaps and prepayment of
amounts due under our credit facility. Please read "Use of Proceeds" in this prospectus supplement.
Opt iona l
At our option, the Notes may be redeemed, in whole or in part at any time and from time to time, at our option at the
re de m pt ion
applicable redemption prices set forth under the heading "Description of the Notes--Optional Redemption" in this
prospectus supplement.
Spe c ia l
If the South Texas Transaction is not consummated, or the Contribution Agreement is terminated, in each case, on or
m a nda t ory
prior to March 1, 2015, we will be required to redeem all of the 2024 Notes then outstanding at 101% of their initial
re de m pt ion
offering price, plus accrued and unpaid interest to the date of redemption. See "Description of the Notes--Special
Mandatory Redemption."
Furt he r
We may create and issue additional notes ranking equally and ratably with the notes offered by this prospectus
issua nc e s
supplement in all respects, so that such additional notes will be consolidated and form a single series with the notes
offered by this prospectus supplement and will have the same terms as to status, redemption or otherwise (except for
the issue date, public offering price and, if applicable, the first interest payment date).
Ra t io of Ea rnings t o Fix e d Cha rge s
The ratio of earnings to fixed charges for each of the periods indicated below is as follows:

Y e a rs e nde d De c e m be r 3 1 ,
Six
m ont hs
e nde d
J une 3 0 ,

2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3
2 0 1 4

Ratio of earnings to fixed charges
1.15x 1.26x 3.04x 2.65x 3.31x
2.69x

These computations include us and our operating subsidiaries and are based on the historical results of Buckeye Partners, L.P. For
these ratios, "earnings" means the sum of the following:
·
income from continuing operations before taxes (excluding income attributable to noncontrolling interests);

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·
plus equity income less than distributions, or less equity income greater than distributions, as applicable; and
·
less capitalized interest, excluding amortization of capitalized interest.
The term "fixed charges" means the sum of the following:
·
interest and debt expense;
·
plus equity income less than distributions, or less equity income greater than distributions, as applicable;
·
plus capitalized interest; and
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·
plus a portion of rentals representing an interest factor.

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Risk Fa c t ors
You should carefully consider the risk factors described below, the risk factors beginning on page 18 of our Annual Report on Form 10-
K for the year ended December 31, 2013 and the risk factors relating to our business under the caption "Risk Factors" beginning on
page 3 of the accompanying base prospectus before making an investment decision. These risks are not the only ones we face.
Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. Our business,
financial condition or results of operations could be materially adversely affected by any of these risks. You should consider carefully
these risk factors together with all of the other information included in this prospectus supplement, the accompanying base prospectus
and the documents incorporated by reference herein and therein before investing in the Notes.
Risk s Re la t e d t o t he Sout h T e x a s T ra nsa c t ion
The South Texas Transaction may not be consummated.
The South Texas Transaction is expected to close in mid- to late-September 2014 and is subject to closing conditions and regulatory
approvals. If these conditions are not satisfied or waived, the South Texas Transaction will not be consummated. If the closing of the
South Texas Transaction is substantially delayed or does not occur at all, or if the terms of the South Texas Transaction are required to
be modified substantially due to regulatory concerns, we may not realize the anticipated benefits of the South Texas Transaction fully or
at all. Certain of the conditions remaining to be satisfied include:
·
The absence of any action or proceeding before any governmental authority with respect to which an unfavorable judgment,
order, decree or ruling would prohibit the consummation of the South Texas Transaction or declare the consummation of the
South Texas Transaction unlawful or require the consummation of the South Texas Transaction to be rescinded; and
·
The expiration of any waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), with respect to the South Texas Transaction.
Subject to the terms of the Contribution Agreement, from and after the date of execution of the Contribution Agreement, the parties will
use their respective commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things
necessary or desirable to consummate the South Texas Transaction, including by using their respective commercially reasonable efforts
to obtain all permits, consents, approvals, authorizations, qualifications and orders of governmental entities as are necessary for the
consummation of the South Texas Transaction and to fulfill the conditions to closing set forth in the Contribution Agreement.
In addition, the Contribution Agreement may be terminated by mutual agreement of the parties thereto or as follows: (a) by either
Trafigura or us, if (i) any permanent injunction, order, ruling, decree or judgment by any governmental authority preventing the
consummation of the transactions contemplated thereby shall have become final and non-appealable, (ii) there occurs a major casualty
loss to the assets that exceeds certain repair cost or repair timing thresholds as detailed in the Contribution Agreement, or (iii) following
the date that is 180 calendar days after the execution of the Contribution Agreement (subject to an automatic extension of an additional
180 days in the event that the applicable HSR Act waiting periods
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have not expired or otherwise been terminated) (the "Termination Date"), provided that such right to terminate will not be available to
any party whose breach of any representation, warranty or covenant contained in the Contribution Agreement has been the cause of, or
has resulted in, the failure of the closing of the South Texas Transaction to occur on or before the Termination Date; (b) by Trafigura, if
(i) there has been a breach or inaccuracy of our representations and warranties, or a failure by us to perform our covenants, under the
Contribution Agreement that, in either case, (x) would result in the failure of certain conditions to the obligations of Trafigura to
consummate the South Texas Transaction and (y) which is not curable or, if curable, is not cured by of the later of (1) the 30th day
after written notice thereof is given by Trafigura to us and (2) the Termination Date; and (c) by us, if (i) there has been a breach or
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inaccuracy of Trafigura's representations and warranties or a failure by Trafigura to perform its covenants, under the Contribution
Agreement that, in either case, (x) would result in the failure of certain conditions to our obligations to consummate the South Texas
Transaction and (y) which is not curable or, if curable, is not cured by the later of (1) the 30th day after written notice thereof is given
by us to Trafigura and (2) the Termination.
If the closing of the South Texas Transaction does not occur on or prior to March 1, 2015, we will be required to redeem the
2024 Notes. If we are required to redeem the 2024 Notes, you may not obtain your expected return on the 2024 Notes.
If the South Texas Transaction is not consummated, or the Contribution Agreement is terminated, in each case, on or prior to March 1,
2015, we will be required to redeem all of the 2024 Notes at a redemption price equal to 101% of their initial offering price, plus
accrued and unpaid interest to but not including the special mandatory redemption date. If your 2024 Notes are redeemed, you may not
obtain your expected return on the 2024 Notes and may not be able to reinvest the proceeds from a special mandatory redemption in
an investment that results in a comparable return. Your decision to invest in the 2024 Notes is made at the time of the offering of the
2024 Notes. Changes in our business or financial condition, or certain of the terms of the Contribution Agreement between the closing
of this offering and the closing of the South Texas Transaction, will have no effect on your rights as a purchaser of the 2024 Notes.
We are not obligated to place the net proceeds of the offering of the Notes in escrow prior to the closing of the South Texas
Transaction and, as a result, we may not be able to repurchase the 2024 Notes upon a special mandatory redemption.
We are not obligated to place the net proceeds of the offering of the Notes in escrow prior to the closing of the South Texas
Transaction or to provide a security interest in those proceeds, and the indenture governing the Notes imposes no other restrictions on
our use of these proceeds during that time. Accordingly, the source of funds for any redemption of Notes upon a special mandatory
redemption would be the proceeds that we have voluntarily retained or other sources of liquidity, including available cash, borrowings,
sales of assets or sales of equity. We may not be able to satisfy our obligation to redeem the 2024 Notes because we may not have
sufficient financial resources to pay the aggregate redemption price on the 2024 Notes. Our failure to redeem or repurchase the 2024
Notes as required under the indenture governing the 2024 Notes would result in a default under the indenture, which could result in
defaults under our and our subsidiaries' other debt agreements and have material adverse consequences for us and the holders of the
2024 Notes. In addition, our ability to redeem or repurchase the 2024 Notes for cash may be limited by law or the terms of other
agreements relating to our indebtedness outstanding at the time.
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Risk s Re la t e d t o t he N ot e s
Your ability to transfer the Notes at a time or price you desire may be limited by the absence of an active trading market,
which may not develop.
Each of the 2024 Notes and the 2044 Notes are a new issue of securities with no established trading market. Although we have
registered the offer and sale of the Notes under the Securities Act of 1933, as amended, we do not intend to apply for listing of the
Notes on any securities exchange or for quotation of the Notes in any automated dealer quotation system. In addition, although the
underwriters have informed us that they intend to make a market in the Notes, as permitted by applicable laws and regulations, they are
not obliged to make a market in the Notes, and they may discontinue their market making activities at any time without notice. An active
market for the Notes may not develop or, if developed, may not continue. In the absence of an active trading market, you may not be
able to transfer the Notes within the time or at the price you desire.
You should not purchase the Notes unless you understand and know you can bear all of the investment risks involving the Notes.
The Notes will be unsecured obligations. As such, the Notes will be effectively junior to any secured debt we may have, to the
existing and future debt and other liabilities of our subsidiaries that do not guarantee the Notes and to the existing and future
secured debt of any subsidiaries that guarantee the Notes.
The Notes will be our unsecured debt and will rank equally in right of payment with all of our other existing and future unsubordinated
debt. The Notes will be effectively junior to all our future secured debt, to the existing and future debt and other liabilities of our
subsidiaries that do not guarantee the Notes and to the secured debt of any subsidiaries that guarantee the Notes. Initially, there will be
no subsidiary guarantors of our obligations under the Notes, and there may be none in the future. Since our operating subsidiaries will
not guarantee the Notes offered by us in this prospectus supplement, the Notes will be effectively subordinated to all debt of our
operating subsidiaries. For example, these Notes will be effectively junior to borrowings under our credit facility that are guaranteed by
certain of our subsidiaries. Please read "Description of Other Indebtedness."
If we are involved in any dissolution, liquidation or reorganization, our secured debt holders will be paid before you receive any amounts
due under the Notes to the extent of the value of the assets securing their debt, and creditors of our subsidiaries may also be paid
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before you receive any amounts due under the Notes. In that event, you may not be able to recover any principal or interest you are
due under the Notes.
We do not have the same flexibility as other types of organizations to accumulate cash, which may limit cash available to
service the Notes or to repay them at maturity.
On a quarterly basis, we generally distribute substantially all of our available cash to our unitholders of record, subject to reasonable
reserves as described below. As a result, we do not have the same flexibility as corporations or other entities that do not pay dividends
or have complete flexibility regarding the amounts they will distribute to their equity holders. Available cash is generally defined as
consolidated cash receipts less consolidated cash expenditures and such retentions for working capital, anticipated cash expenditures
and contingencies as our general partner deems appropriate. The timing and amount of our distributions could
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significantly reduce the cash available to pay the principal, premium (if any) and interest on the Notes. The board of directors of our
general partner will determine the amount and timing of such distributions and has broad discretion to establish and make additions to
our reserves or the reserves of our operating subsidiaries as it determines are necessary or appropriate.
Although our payment obligations to our unitholders are subordinate to our payment obligations to you, the market value of our units
may substantially decrease as a result of decreases in the amount we distribute per unit. Accordingly, if we experience a liquidity
problem in the future, we may not be able to issue equity in sufficient amounts to recapitalize our debt, including the Notes.
We could enter into various transactions that could increase the amount of our outstanding debt, adversely affect our capital
structure or credit ratings or otherwise adversely affect holders of the Notes.
The terms of the Notes do not prevent us from entering into a variety of acquisition, change-of-control, refinancing, recapitalization, or
other highly leveraged transactions. As a result, we could enter into a variety of transactions that could increase the total amount of our
outstanding indebtedness, adversely affect our capital structure or credit ratings or otherwise adversely affect the holders of the Notes.
To service our indebtedness, we will use a significant amount of cash. Our ability to generate cash to service our
indebtedness depends on many factors beyond our control.
Our ability to make payments on our indebtedness, including the Notes, and to fund planned capital expenditures will depend on our
ability to generate cash in the future. This ability is subject to general economic, financial, competitive, legislative, regulatory and other
factors that are beyond our control. We cannot assure you that cash flow generated from our business and other sources of cash,
including future borrowings by us under our credit facility, will be sufficient to enable us to pay our indebtedness, including the Notes,
and to fund our other liquidity needs.
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U se of Proc e e ds
We estimate that we will receive net proceeds from this offering of approximately $593.8 million (after deducting the underwriting
discount and estimated offering expenses payable by us). We intend to use the net proceeds from this offering (i) to fund a portion of
the purchase price of the South Texas Transaction and related expenses, (ii) to fund the redemption of all $275.0 million aggregate
principal amount of our outstanding 5.300% Notes due October 15, 2014 and (iii) for general partnership purposes, including the
settlement of existing interest rate swaps and prepayment of amounts due under our credit facility. If the South Texas Transaction is not
consummated, or the Contribution Agreement is terminated, in each case, on or prior to March 1, 2015, we will be required to redeem
all of the 2024 Notes then outstanding at 101% of their initial offering price, plus accrued and unpaid interest to the date of redemption.
See "Description of Notes--Special Mandatory Redemption."
As of September 5, 2014, approximately $427.0 million of indebtedness was outstanding under our revolving credit facility. We used
these funds for working capital purposes and to finance internal growth activities and acquisitions. Indebtedness under our revolving
credit facility bears interest under one of two rate options, selected by us, equal to either (i) the highest of (a) the federal funds rate plus
0.5%, (b) SunTrust Bank's prime rate, or (c) an adjusted London Interbank Offered Rate determined on a daily basis for an interest
period of one month, in each case plus an applicable margin, or (ii) an adjusted London Interbank Offered Rate plus 1%. The
applicable margin is determined based on ratings assigned by Standard & Poor's Rating Services and Moody's Investor Service for our
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