Energy Transfer Partners LP (ETP)

[ThSeeker]

Some strong news today.
http://ih.advfn.com/p.php?pid=nmona&article=67721197&symbol=ETP

Energy Transfer Partners, L.P. (NYSE: ETP) and Energy Transfer Equity, L.P. (NYSE: ETE) announced today the exchange of 21 million ETP common units, currently owned by ETE, for 100% of the general partner (GP) interest and the incentive distribution rights (IDRs) of Sunoco LP (NYSE: SUN). In addition, as part of this transaction, ETE has agreed to provide ETP a $35 million annual IDR subsidy for two years as described below.

The cash flow accretion expected to be realized by ETP from this transaction is more than $0.30 per common unit per annum, which will continue to support ETP’s attractive distribution growth going forward.

For ETE, this transaction continues its transition to a pure play general partner for the overall Energy Transfer group. Pro forma for this transaction, ETE expects to maintain its distribution growth rate while migrating to its traditional 1.0x distribution coverage ratio.

In connection with the original acquisition of Susser Holdings Corporation (Susser) by ETP in August 2014, ETE agreed to provide ETP an annual $35 million IDR subsidy for 10 years, subject to automatic termination in the event that ETE acquired the GP interest and IDRs of SUN in exchange for ETP common units owned by ETE. As part of the current transaction, ETE has agreed to provide ETP a $35 million IDR subsidy for an additional two years (through June 30, 2017).

Transaction Rationale:

For ETP:

Reduces ETP’s common unit count by almost 5% and has a commensurate reduction to the amount of distributions to be paid to ETE with respect to the ETP IDRs;
Solidifies current distribution increases while continuing to strengthen its distribution coverage ratio;
The IDR subsidy for two years provides additional near term cash flow benefits;
Crystallizes tremendous value maximization from the overall Susser transaction in less than 12 months; and
Together with ETP’s focus on its organic growth projects, this transaction should be a positive catalyst for ETP’s unit price and help improve its current cost of capital.

For ETE:

Reinforces ETE’s strategy to become a traditional GP within the Energy Transfer family;
Increases in value of the underlying SUN GP creates incremental upside to ETE;
Direct benefit from expected dynamic drop down and third party growth at SUN; and
Continued upside from ETP IDRs as ETP accelerates its future distribution growth.

ETP and ETE expect there will be no credit ratings impact from this transaction. Following this transaction, SUN will no longer be consolidated for accounting purposes by ETP, but instead will appear in the consolidated financial statements for ETE.

This transaction is expected to close in August 2015 after the record date for second quarter distributions for both the SUN GP interest and IDRs and ETP common units, but will be effective as of July 1, 2015.


info from other source on this transaction:
7:44 am Energy Transfer and Energy Transfer Equity, L.P. (ETE) announce the exchange of 21 million ETP common units, currently owned by ETE, for 100% of the general partner interest and the incentive distribution rights of Sunoco LP (SUN) (ETP) : For ETE, this transaction continues its transition to a pure play general partner for the overall Energy Transfer group.

Pro forma for this transaction, ETE expects to maintain its distribution growth rate while migrating to its traditional 1.0x distribution coverage ratio. The cash flow accretion expected to be realized by ETP from this transaction is more than $0.30 per common unit per annum, which will continue to support ETP's attractive distribution growth going forward.
In addition, as part of this transaction, ETE has agreed to provide ETP a $35 million annual IDR subsidy for two years as described below.

7:44 am Energy Transfer and Sunoco LP (SUN) announce the ~$1.94 billion dropdown of Susser Holdings Corp. (ETP) : Co and Sunoco LP (SUN) announced the dropdown of 100% of Susser Holdings Corp for ~$1.94 billion. In addition, there will be an exchange for 11 million SUN units owned by SHC for another 11 million new SUN units to a subsidiary of ETP.

For the SHC dropdown, SUN will pay to ETP approximately $970 million in cash and issue approximately 22 million SUN units valued at approximately $970 million.
For co, transaction is expected to be immediately accretive to distributable cash flow for 2015 and beyond.
For SUN, the transaction is breakeven with respect to distributable cash flow in 2015 and significantly accretive thereafter.
For SUN, dynamic EBITDA growth at SHC creates a strong runway for increasing distributable cash flow beginning in 2016