Energy Transfer Partners Prices Preferred Units

Huge MLP Energy Transfer Partners (NYSE:ETP) has priced a large offering of fixed-to-floating rate units with an initial coupon of 7.375%.  The fixed rate will remain until 4/2023 at which point the coupon will float quarterly at a rate of 3 month Libor plus a spread of 4.53%.  While the initial is pretty decent for a quality company the floating rate spread is less enticing.

Dividends are cumulative, but will not be qualified for preferential tax treatment.

The offering is 18 million units with an additional 2.7 million shares set aside for overallotment.

The shares will begin trading tomorrow (Thursday) on the OTC Grey Market under the temporary ticker symbol of ETPPP.

Owners of the issue will receive a K-1 at tax time instead of the preferred 1099.

The pricing term sheet can be found here.