Mountaineer Gas issues $30 million and $20 million senior notes

Mountaineer Gas Company, a wholly owned subsidiary of UGI Corporation, entered into a Note Purchase Agreement on September 28, 2026, to issue $30 million in aggregate principal amount of 5.95% Senior Notes, Series H, due September 28, 2038, and $20 million in 6.05% Senior Notes, Series I, due September 28, 2041. The notes were priced on June 30, 2026, and funding occurred on the filing date.

The Series H and Series I notes are unsecured and unsubordinated obligations of Mountaineer that rank pari passu with existing and future unsecured debt. Interest payments are payable semiannually on March 28 and September 28 of each year. Proceeds from the issuance will be used primarily to refinance indebtedness and for general corporate purposes. The private placement is exempt from registration under the Securities Act of 1933.

The Note Purchase Agreement includes standard covenants regarding the maintenance of existence, payment of taxes, compliance with laws, and maintenance of properties in good repair. It also contains restrictive financial covenants that limit the sale of assets to 15% of consolidated total assets in any fiscal year, subject to specific safe harbors. Priority indebtedness cannot exceed 15% of consolidated tangible net worth, and the ratio of total debt to total capitalization must not exceed 0.65 to 1.00.

Mountaineer must maintain a ratio of consolidated EBITDA to consolidated interest expense of at least 2.00 to 1.00 and ensure its consolidated tangible net worth does not fall below $70 million at any time. The agreement specifies customary events of default, including failure to pay principal or interest when due, failure to satisfy financial or negative covenants, and bankruptcy or insolvency events involving Mountaineer or its material subsidiaries.

The notes are callable by Mountaineer at any time at a price equal to 100% of the principal amount plus a make-whole amount and accrued interest. After June 30, 2038, for the Series H notes, and June 30, 2041, for the Series I notes, Mountaineer may call them at 100% of the principal amount plus accrued interest without a make-whole payment.

Holders have the right to require prepayment if Mountaineer ceases to be majority owned by UGI Corporation. This includes scenarios where UGI holds less than 51% of Mountaineer's voting power or economic interests. Prepayment is also required if a change of control agreement is executed and Mountaineer's debt rating falls below BBB- at Fitch or Standard & Poor's or Baa3 at Moody's, or if no rating is provided by these agencies.