ONEOK Inc. (NYSE: OKE) has priced an offering to sell $500 million of 7.50% senior notes due 2023. The notes will be issued under ONEOK's existing shelf registration statement previously filed with the US Securities and Exchange Commission.
The net proceeds, after deducting underwriting discounts and estimated expenses, are expected to be approximately $487.1 million. ONEOK expects to use the proceeds and cash on hand to purchase additional common units from ONEOK Partners LP (NYSE: OKS) in a private placement. Funds managed by Kayne Anderson Capital Advisors LP also will purchase $100 million of common units from ONEOK Partners concurrently with ONEOK's purchase.
ONEOK is the parent company of ONEOK Partners GP LLC, the sole general partner of ONEOK Partners. Following the common unit purchases, ONEOK's and the General Partner's aggregate ownership interest in ONEOK Partners will increase to 41.2% from 36.8%.
The sole book-running manager for the offering is Citigroup. ONEOK expects the notes offering to close on Aug. 21.