Summit Midstream Partners’ Term Loan Restructuring

Kirkland advised Summit Midstream Partners on the deal.

Summit Midstream Partners, LP(NYSE: SMLP) announced that substantially all closing conditions to the consensual Term Loan restructuring transaction (the “TL Restructuring”) involving its wholly owned, indirect subsidiary, Summit Midstream Partners Holdings, LLC (“SMP Holdings”) have been satisfied. Lenders collectively holding 100% of the aggregate principal amount of claims, including the approximately $155.2 million in principal amount outstanding, under SMP Holdings’ Term Loan (the “Term Loan”) have consented to the TL Restructuring and, at closing, will receive their pro rata shares of consideration consisting of $26.5 million of cash and approximately 2.3 million SMLP common units currently pledged as collateral under the Term Loan (which have been adjusted to properly reflect the recent 1-for-15 reverse SMLP common unit split) in full satisfaction of SMP Holdings’ outstanding obligations under the Term Loan.

The TL Restructuring is expected to close on November 17, 2020. Upon closing of the TL Restructuring, SMLP will distribute the consideration to the Term Loan lenders and pay applicable expenses, after which the Term Loan will be fully discharged and the Term Loan lenders will waive their rights to any and all claims against SMP Holdings and its affiliates under the Term Loan and release the non-economic general partner interest in SMLP from SMP Holdings’ collateral package under the Term Loan.

In addition, the $180.75 million deferred purchase price obligation (the “DPPO”) that SMLP owes to SMP Holdings will be fully settled concurrently with the closing of the TL Restructuring once SMLP makes an approximate $27.0 million cash payment to SMP Holdings. Following this payment, the DPPO will be fully repaid and cease to exist. SMP Holdings will utilize the approximate $27.0 million of cash received from SMLP to fund the cash consideration and certain expenses to be paid to the Term Loan lenders in conjunction with the closing of the TL Restructuring.

SMLP is a value-driven limited partnership focused on developing, owning and operating midstream energy infrastructure assets that are strategically located in unconventional resource basins, primarily shale formations, in the continental United States.

Kirkland advised Summit Midstream Partners with a team led by debt finance partners Rohit Chaudhry (Picture) and Rustin Brown and restructuring partner Christopher Marcus and associates Stephen Iacovo and Charles Sterrett; with assistance from transactional partners Erik Hepler and Sean Wheeler and restructuring associate Ameneh Bordi.

Involved fees earner: Ameneh Bordi – Kirkland & Ellis; Rustin Brown – Kirkland & Ellis; Rohit Chaudhry – Kirkland & Ellis; Erik Hepler – Kirkland & Ellis; Stephen Iacovo – Kirkland & Ellis; Christopher Marcus – Kirkland & Ellis; Charles Sterret – Kirkland & Ellis; Sean Wheeler – Kirkland & Ellis;

Law Firms: Kirkland & Ellis;

Clients: Summit Midstream Partners, LP;

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Author: Ambrogio Visconti