Eagle Rock and Regency closed the deal
The consideration received by the Partnership for the Contribution includes $576.2 million of cash; 8,245,859 Regency common units (valued at approximately $265 million based on the closing price of Regency common units on June 30, 2014) and the exchange of $498.9 million face amount of newly-issued Regency 8.375% Senior Notes due 2019 for $498.9 million face amount of Eagle Rock's existing 8.375% Senior Notes due 2019.
$51.1 million of existing EROC Senior Notes did not exchange and will remain outstanding. Having secured a sufficient number of consents as part of the exchange offer, the indenture governing the remaining outstanding EROC Senior Notes will be amended today to eliminate substantially all of the restrictive covenants and certain events of default pertaining to the EROC Senior Notes.
Cash proceeds from the contribution will be used to pay down borrowings under Eagle Rock's revolving credit facility. Pro-forma for the sale, the Partnership's debt balance will be approximately $265 million and its leverage will be approximately 2.2x. In addition, the Partnership will own 8,245,859 Regency common units (valued at approximately $265 million). ■