PREFERRED UNITS |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Equity [Abstract] | |
| PREFERRED UNITS | PREFERRED UNITS Series B Cumulative Convertible Preferred Units On November 28, 2017, the Partnership issued and sold in a private placement 14,711,219 Series B cumulative convertible preferred units representing limited partner interests in the Partnership for a cash purchase price of $20.39 per Series B cumulative convertible preferred unit, resulting in total proceeds of approximately $300.0 million. The Series B cumulative convertible preferred units are entitled to quarterly distributions based on an annual distribution rate (the “Distribution Rate”), which is subject to adjustment every two years (each, a “Readjustment Date”) with the last Readjustment Date on November 28, 2025. The rate set on each Readjustment Date is equal to the greater of (i) the Distribution Rate in effect immediately prior to the relevant Readjustment Date and (ii) the 10-year Treasury Rate as of such Readjustment Date plus 5.5% per annum; provided, however, that for any quarter in which quarterly distributions are accrued but unpaid, the Distribution Rate shall be increased by 2.0% per annum for such quarter. The Distribution Rate was adjusted to 9.8% effective November 28, 2023 and remained the same at 9.8% for the November 28, 2025 Readjustment Date. The Partnership cannot pay any distributions on any junior securities, including common units, prior to paying the quarterly distribution payable to the preferred units, including any previously accrued and unpaid distributions. The Series B cumulative convertible preferred units have a stated liquidation preference of $21.41 per unit, or $315.0 million in the aggregate, plus any accrued and unpaid distributions, or if greater, the amount such units would be entitled to if converted into common units. The Series B cumulative convertible preferred units may be converted by each holder at its option, in whole or in part, into common units on a one-for-one basis at the purchase price of $20.39, adjusted to give effect to any accrued but unpaid accumulated distributions on the applicable Series B cumulative convertible preferred units through the most recent declaration date. However, the Partnership shall not be obligated to honor any request for such conversion if such request does not involve an underlying value of common units of at least $10 million based on the closing trading price of common units on the trading day immediately preceding the conversion notice date, or such lesser amount to the extent such exercise covers all of a holder's Series B cumulative convertible preferred units. The Partnership has the option to redeem all or a portion (equal to or greater than $100 million) of the Series B cumulative convertible preferred units during biennial 90-day windows. On August 21, 2025, the Partnership entered into an agreement with the holders of its Series B cumulative convertible preferred units. Under the agreement, the Partnership agreed not to exercise its redemption option, and the holders agreed to vote their preferred units in accordance with the recommendations of the Partnership’s Board of Directors on ordinary course matters and to certain customary transfer and standstill restrictions. These provisions remain in effect through November 27, 2027, with the next redemption window opening on November 28, 2027. The Partnership must provide 20 business days' notice to the holders of the Series B cumulative convertible preferred units of its intent to redeem, and the holders may either allow the redemption to occur or elect to convert the Series B cumulative convertible preferred units into common units as described above. The Series B cumulative convertible preferred units had a carrying value of $300.5 million, including accrued distributions of $7.4 million, as of June 30, 2026 and December 31, 2025. The Series B cumulative convertible preferred units are classified as mezzanine equity on the consolidated balance sheets since certain provisions of redemption are outside the control of the Partnership.
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