NGL Energy Secures $950M Loan in Major Capital Structure Overhaul

TULSA, Okla. – March 12, 2026 – NGL Energy Partners LP has finalized a significant financial restructuring, closing a new seven-year, $950 million senior secured term loan. The move is a cornerstone of a broader strategy to streamline the company's balance sheet, repay existing debt, and repurchase a substantial portion of its high-cost preferred equity.

The Tulsa-based midstream company announced that the proceeds will be used to refinance its existing term loan and redeem approximately 195,000 of its Class D Preferred Units, a move designed to enhance its financial footing. This transaction is the latest in a series of strategic financial maneuvers aimed at simplifying the company's complex capital stack.

“The successful execution of the incremental secured debt financing represents a meaningful step toward a simpler and more flexible capital structure,” said Mike Krimbill, NGL’s Chief Executive Officer, in a statement. He noted that the funds would enable the repurchase of the preferred units, a key objective for management. Following the transaction, about 316,000 Class D units will remain outstanding.

A Strategic Overhaul of the Balance Sheet

This new $950 million term loan, which matures in 2033, represents a significant increase from the previous facility of $687.8 million, providing an incremental $250 million. It is not merely about adding debt, but rather reconfiguring it. This action is a continuation of a major refinancing push that began earlier in the year. In February 2024, NGL completed one of the midstream sector's largest financing efforts since 2022, a $2.9 billion package that included new senior secured notes and a term loan facility. That initiative successfully extended the company's weighted average debt maturity by approximately three years.

In conjunction with the new loan, NGL has also amended its senior secured asset-based revolving credit facility (ABL). The aggregate commitment under the ABL was reduced from $475 million to $425 million. While this lowers the total available credit line, the amendment also brings favorable terms, including lower interest margins and commitment fees. This adjustment is expected to optimize financing costs and improve net liquidity by reducing ongoing expenses.

By strategically managing its debt portfolio, NGL is also adjusting its exposure to interest rate fluctuations. The new term loan features SOFR-based floating interest rates. This aligns with management's previously stated desire for a balanced mix of fixed and floating-rate debt, positioning the company to potentially benefit from any future decreases in benchmark interest rates.

Simplifying Equity and Reducing Costs

A critical component of the restructuring is the redemption of nearly 200,000 Class D Preferred Units. These units function as a form of high-cost equity, requiring fixed dividend payments that represent a consistent drain on cash flow. By using a portion of the new loan proceeds to buy back these units, NGL is effectively deleveraging its equity structure and reducing its overall cost of capital.

This move is part of a deliberate, ongoing effort. The company has been systematically repurchasing these units over several quarters, signaling a strong commitment to simplifying its balance sheet. Eliminating these obligations frees up capital that can be redirected toward core business growth or further debt reduction, enhancing the company’s financial resilience.

The strategy reflects a disciplined approach to capital allocation. Instead of prioritizing distributions to common unitholders, management is focusing on strengthening the company’s financial foundation by retiring more expensive forms of capital first. This prudent tactic is aimed at creating long-term value and stability for all stakeholders.

Market Signals and Sector Context

The market has taken note of NGL's proactive financial management. Earlier this year, following the announcement of its initial refinancing plans, S&P Global Ratings upgraded NGL's corporate credit rating to 'B' from 'B-', citing an improved debt maturity profile and reduced refinancing risk. While the market's immediate reaction to the latest $950 million loan is still unfolding, the ability to secure such a significant facility underscores a degree of lender confidence.

This confidence is likely bolstered by the strong performance of NGL's core operations, particularly its Water Solutions segment. The segment, which transports and disposes of water produced during oil and gas extraction, has become a powerful engine for growth and cash flow. It has consistently reported record disposal volumes and robust earnings, providing a stable operational backbone that makes the company's debt more attractive to lenders.

NGL's actions are also consistent with broader trends in the capital-intensive midstream sector. Many industry players are currently focused on extending debt maturities, optimizing their capital structures, and improving credit metrics. In a sector where access to capital is paramount, demonstrating financial discipline and a clear path to deleveraging is crucial for maintaining investor and lender trust.

Fueling Future Growth Through Financial Discipline

Ultimately, NGL's financial restructuring is not an end in itself, but a means to support its long-term operational strategy. The creation of a “simpler and more flexible capital structure” is designed to provide the stability needed to focus on internal growth opportunities and enhance capital efficiency.

Management has articulated clear long-term financial targets, including achieving a debt-to-EBITDA ratio of 3.5x. The current deleveraging and refinancing efforts are direct steps toward this goal. By strengthening the balance sheet, NGL is better positioned to weather market volatility and fund strategic initiatives without relying on costly external financing.

The company’s focus remains squarely on its high-performing assets. With the Water Solutions segment projected to drive adjusted EBITDA to over $700 million by fiscal 2027, the firm has a clear line of sight to organic growth. The financial discipline demonstrated through these recent transactions provides a solid foundation to support that growth, ensuring NGL can continue to invest in its infrastructure and services while methodically improving its credit profile.