© 2015 The Texas Lawbook.
By Natalie Posgate
(Jan. 29) – Plains All American Pipeline has closed a private placement offering to a group of investors that raised $1.6 billion for the company.
The Houston-based midstream master limited partnership plans to use the money for capital expenditures, repayment of debt, and general partnership purposes. The transaction points to the growing tendency for oil and gas companies to turn to private or institutional investors to help raise cash as the public players in the capital markets continue a streak of inaccessibility due to an increasing state of turbulence caused by low oil prices.
In conjunction with PAA General Counsel Richard McGee, Vinson & Elkins led the offering for the MLP, which was an issuance of 61 million units of a newly authorized series of 8 percent perpetual Series A Convertible Preferred Units at $26.25 per unit. The private placement closed for approximately $142 million more than was originally anticipated when it was first announced on Jan. 12.
Leading the V&E deal team were partners David Oelman and Alan Beck in Houston, who received assistance from associates Adam Law, Austin March, Robert Wilson and Matt McClellan and tax partners John Lynch and Ryan Carney.
Oelman and Beck led a public debt offering for PAA in the third quarter of last year – ironically the same timeframe that capital markets activity began to plummet. Data from The Texas Lawbook’s Corporate Deal Tracker shows that it was only one of 40 offerings that occurred during Q3 2015, a stark contrast from the first half of 2015, which saw 179 offerings. Baker Botts represented the underwriters in that PAA offering.
Baker Botts is also involved in this week’s private placement, leading the deal for most of the investment group (called primary purchasers), which included affiliates of EnCap Investments, LP; EnCap Flatrock Midstream; The Energy Minerals Group; Kanye Anderson Capital Advisors; and First Reserve Advisors.
Houston partner Josh Davidson and Dallas partner Doug Rayburn led the Baker Botts team, which also included Houston tax partner Mike Bresson and associates Jeremy Moore and Jamie Yarbrough.
A Houston-based team from Sidley Austin led by partner Cliff Vrielink advised Stonepeak Partners, another primary purchaser involved in the private placement. Vrielink received assistance from partners Tim Langenkamp, Tim Devetski and Herschel Hamner, as well as associates Tim Chandler and Daniel Allison.
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