Corporate Finance

UGI Utilities funds $125 million senior-note private placement

UGI Utilities funded $125 million of 5.45% senior notes on August 11, 2026. The notes mature on August 15, 2031, and the proceeds are intended primarily for debt refinancing and general corporate purposes.

By Carter Hayes ยท

Key takeaways

  • UGI Utilities, a wholly owned UGI Corporation subsidiary, funded $125 million of 5.45% senior notes on August 11, 2026.
  • The notes mature on August 15, 2031, with interest payable twice yearly on February 15 and August 15.
  • UGI Utilities stated that it expects to use the proceeds primarily to refinance indebtedness and for general corporate purposes.
  • The note purchase agreement includes asset-sale, debt and leverage restrictions, as well as change-in-control and default provisions.

Private placement funds on August 11

UGI Utilities entered into a note purchase agreement on August 11, 2026, for a private placement of $125 million in aggregate principal amount of 5.45% senior notes. Funding occurred the same day.

The notes mature on August 15, 2031. Their pricing occurred on July 23, 2026, and the private placement is exempt from registration under the Securities Act of 1933.

The notes are unsecured and unsubordinated obligations of UGI Utilities and rank equally with its existing and future unsecured, unsubordinated indebtedness.

Proceeds target refinancing and corporate purposes

UGI Utilities said it plans to use the proceeds primarily to refinance indebtedness and for general corporate purposes. The filing does not provide a dollar allocation between those purposes.

Interest on the notes is payable semiannually on February 15 and August 15. UGI Utilities may prepay the notes before maturity under terms that include principal, accrued interest and, in most cases, a make-whole premium, provided no default or event of default is continuing.

For prepayments made less than 30 days before maturity, the agreement provides for payment of principal and accrued interest without a make-whole premium, subject to the same condition regarding defaults.

Agreement sets financial and ownership-related terms

The agreement limits asset sales to 15% of consolidated total assets during any period of 12 consecutive months, subject to specified safe harbors and exclusions. It also limits indebtedness, excluding certain subsidiary indebtedness, plus basket liens to 10% of consolidated total assets.

UGI Utilities must maintain a total-debt-to-total-capitalization ratio no greater than 0.65 to 1.00 at the end of each fiscal quarter. The agreement also includes covenants covering matters such as taxes, legal compliance, property maintenance, insurance, records, mergers and line of business.

Noteholders may require prepayment if UGI Utilities is no longer directly or indirectly majority owned by UGI Corporation. The stated ownership condition includes UGI Corporation holding at least 51% of voting power and economic interests in UGI Utilities.