(19) Subsequent Events

The Merger

On October 21, 2018, ENLK, ENLC, the General Partner, the Managing Member, and NOLA Merger Sub entered into the Merger Agreement pursuant to which, on January 25, 2019, NOLA Merger Sub merged with and into ENLK, with ENLK continuing as the surviving entity and as a subsidiary of ENLC. As a result of the Merger:


•	Each issued and outstanding ENLK common unit (except for ENLK common units held by ENLC and its subsidiaries) has been converted into the right to receive 1.15 ENLC common units.


•	The General Partner’s incentive distribution rights in ENLK have been eliminated.


•	The Series B Preferred Units will continue to be issued and outstanding following the Merger, except that certain terms of the Series B Preferred Units have been modified pursuant to an amended partnership agreement of ENLK. See “Note 8—Certain Provisions of the Partnership Agreement” for additional information regarding the modified terms of the Series B Preferred Units.

•

ENLC issued to Enfield, the current holder of the Series B Preferred Units, for no additional consideration, ENLC Class C Common Units equal to the number of Series B Preferred Units held by Enfield immediately prior to the effective time of the Merger, in order to provide Enfield with certain voting rights with respect to ENLC. For each additional Series B Preferred Unit issued by ENLK in quarterly in-kind distributions, ENLC will issue an additional ENLC Class C Common Unit to the applicable holder of such Series B Preferred Unit. In addition, for each Series B Preferred Unit that is exchanged into an ENLC common unit, an ENLC Class C Common Unit will be canceled.


•	The Series C Preferred Units and all of ENLK’s senior notes continue to be issued and outstanding following the Merger.

•

All unit-based awards issued and outstanding immediately prior to the effective time of the Merger under the GP Plan have been converted into an award with respect to ENLC common units with substantially similar terms as were in effect immediately prior to the effective time, with certain adjustments to the performance-based vesting of terms of applicable awards related to the performance of ENLC.


•	ENLC assumed the outstanding debt under the Term Loan and ENLK became a guarantor thereof.

Consolidated Credit Facility

We refinanced our existing revolving credit facilities at ENLK and ENLC. As of December 31, 2018, we had a $1.5 billion facility at ENLK and a $250.0 million facility at ENLC. Following the Merger, we have combined these credit facilities into one $1.75 billion credit facility at ENLC, with respect to which ENLK is a guarantor.

On December 11, 2018, ENLC entered into the Consolidated Credit Facility. The Consolidated Credit Facility became available for borrowings and letters of credit upon closing of the Merger. At the closing of the Merger, ENLK became a guarantor under the Consolidated Credit Facility.

The Consolidated Credit Facility permits ENLC to borrow up to $1.75 billion on a revolving credit basis and includes a $500.0 million letter of credit subfacility.

The Consolidated Credit Facility includes procedures for additional financial institutions to become lenders, or for any existing lender to increase its revolving commitment thereunder, subject to an aggregate maximum of $2.25 billion for all commitments under the Consolidated Credit Facility.

The Consolidated Credit Facility will mature on January 25, 2024, unless ENLC requests, and the requisite lenders agree, to extend it pursuant to its terms. The Consolidated Credit Facility contains certain financial, operational, and legal covenants. The financial covenants are tested on a quarterly basis, based on the rolling four-quarter period that ends on the last day of each fiscal quarter. The financial covenants include (i) maintaining a ratio of consolidated EBITDA (as defined in the Consolidated Credit Facility, which term includes projected EBITDA from certain capital expansion projects) to consolidated interest charges of no less than 2.50 to 1.0 at all times prior to the occurrence of an investment grade event (as defined in the Consolidated Credit Facility) and (ii) maintaining a ratio of consolidated indebtedness to consolidated EBITDA of no more than 5.00 to 1.00. If ENLC consummates one or more acquisitions in which the aggregate purchase price is $50.0 million or more, ENLC can elect to increase the maximum allowed ratio of consolidated indebtedness to consolidated EBITDA to 5.5 to 1.0 for the quarter in which the acquisition occurs and the three subsequent quarters.

Borrowings under the Consolidated Credit Facility bear interest at ENLC’s option at the Eurodollar Rate (the LIBOR Rate) plus an applicable margin (ranging from 1.125% to 2.00%) or the Base Rate (the highest of the Federal Funds Rate plus 0.50%, the 30-day Eurodollar Rate plus 1.0% or the administrative agent’s prime rate) plus an applicable margin (ranging from 0.125% to 1.00%). The applicable margins vary depending on ENLC’s debt rating. Upon breach by ENLC of certain covenants governing the Consolidated Credit Facility, amounts outstanding under the Consolidated Credit Facility, if any, may become due and payable immediately.

At December 31, 2018, we were in compliance with and expect to be in compliance with the covenants in the Consolidated Credit Facility for at least the next twelve months.

Transfer of EOGP interest

On January 31, 2019, ENLC transferred its 16.1% limited partner interest in EOGP to the Operating Partnership in exchange for 55,827,221 ENLK common units. EOGP is now a wholly-owned subsidiary of the Operating Partnership.

Reporting Segments

Effective January 1, 2019, we will report financial performance in four operating segments: Oklahoma, Permian, Louisiana and North Texas. Crude and Condensate operations will be combined regionally with natural gas and NGL operations in Oklahoma and Permian, and ORV operations will be included in the Louisiana segment.