Dt Midstream's USD650 million senior secured notes offering and amendment to revolving credit facility

• Entering into a commitment letter providing for a bridge loan facility in an aggregate initial principal amount of USD700m.
• An upsized follow-on public offering and sale of 4,168,750 shares of common stock for gross proceeds of approximately USD421m (as previously highlighted).
• A Rule 144A/Regulation S offering of USD650m aggregate principal amount of new senior secured notes.
• An amendment to DT Midstream’s USD1bn revolving credit facility. 

DT Midstream has now successfully secured all financing necessary to fund its pending acquisition, which is expected to close in late 2024 or early 2025, subject to regulatory approvals and other customary closing conditions.

Senior secured notes

On December 6, 2024, DT Midstream closed its Rule 144A/Regulation S offering of USD650m aggregate principal amount of 5.800% Senior Secured Notes due 2034. The notes are guaranteed by certain of DT Midstream’s subsidiaries and secured by a first-priority lien on certain assets of DT Midstream and its subsidiary guarantors that secure DT Midstream’s existing credit facilities and existing senior secured notes.

Revolving credit facility amendment

On December 12, 2024, DT Midstream entered into an amendment to its USD1bn revolving credit facility agented by Barclays Bank PLC. The amendment, among other things, extended the maturity date of the revolving credit facility, and implemented customary “limited condition transactions” provisions which enable DT Midstream to enter into future acquisitions and other transactions with the conditionality to the consummation thereof subject only to customary “SunGard” conditions.

The pending acquisition

On November 19, 2024, DT Midstream announced it had entered into an agreement to acquire three FERC-regulated natural gas transmission pipelines from ONEOK, Inc. for USD1.2bn. DT Midstream intends to use the net proceeds from its senior secured notes offering, together with proceeds from its recently completed offering of common stock, borrowings under the revolving credit facility and cash on hand, to fund the consideration payable in the pending acquisition.

DT Midstream

DT Midstream is an owner, operator and developer of natural gas interstate and intrastate pipelines, storage and gathering systems, compression, treatment and surface facilities. The company transports clean natural gas for utilities, power plants, marketers, large industrial customers and energy producers across the Southern, Northeastern and Midwestern United States and Canada. The Detroit-based company offers a comprehensive, wellhead-to-market array of services, including natural gas transportation, storage and gathering. 

A&O Shearman

The A&O Shearman team was led by partners Bill Nelson and Emily Leitch (both Houston – U.S. capital markets), partner Ryan Robski (Toronto/New York – U.S. capital markets), partners Gus Atiyah and Michael Steinberg (both New York – debt finance), counsel Judy Little (Houston – U.S. capital markets) and associates Ilya Mamin (New York – U.S. capital markets), Daniel Kim (Houston – U.S. capital markets), Magnus Wieslander, Ashley Shan and Aaron Pi (all New York – debt finance).

Other A&O Shearman lawyers supporting the transactions included partner Jason Pratt (New York – environmental), partner Larry Crouch (Menlo Park – tax), partner Lena Kiely (New York – financial services regulatory), of counsel Paul Schreiber (New York – funds and asset management), counsel Matthew Behrens (New York – compensation, employment, pensions and governance), and associates Daniel Kachmar (New York – tax), Taylor Pugliese (New York – financial services regulatory), Stephanie Li (Washington D.C. – funds and asset management), Christopher Torikoglu (New York – tax) and Sy Ro (New York – funds and asset management).