Teekay to issue $200 mln Private Placement of Equity Securities

Teekay Offshore Partners L.P. (Teekay Offshore or the Partnership) (NYSE:TOO) announced today that it has entered into binding agreements to issue $200 million of equity securities through two private placements:

•    Series D Preferred Units: The Partnership has agreed to issue $100 million of 10.5% Series D Cumulative Exchangeable Perpetual Preferred Units (Series D Preferred Units) to a group of investors. These investors will also receive approximately 4.5 million warrants with an exercise price equal to the closing price of the Partnership's common units on June 16, 2016, or $4.55 per unit, and 2.25 million warrants with an exercise price at a 33% premium to the closing price of the Partnership's common units on June 16, 2016, or $6.05 per unit. The warrants have a seven-year term. The Series D Preferred Units are exchangeable into common units of the Partnership at the option of the holder at any time after five years. In addition, the Partnership has the option to redeem the Series D Preferred Units any time after five years.

•    Common Units: The Partnership has also agreed to issue $100 million of common units to a group of investors priced at the closing price of the Partnership's common units on June 16, 2016, or $4.55 per unit.

Both equity issuances are expected to close on or prior to June 30, 2016, subject to the completion of Teekay (TK) Offshore's other previously announced financing initiatives. The Partnership intends to use the net proceeds from these offerings for general partnership purposes, including the funding of its existing newbuilding installments and capital conversion projects.

"These equity issuances represent the most significant components of Teekay Offshore's previously announced financing initiatives," commented Peter Evensen, Teekay Offshore's Chief Executive Officer. "With the pricing and placement of these offerings, we remain on track to complete all of our financing initiatives by June 30, 2016. Together with cash flow from operations, these financing initiatives, which include bank financings totaling $400 million, are expected to cover all of our medium-term liquidity requirements and fully finance Teekay Offshore's $1.6 billion of committed growth projects scheduled to deliver through 2018, which we expect will contribute to further growth of our distributable cash flow."