EIG Global Energy Partners has agreed to invest $1bn in Breitburn Energy Partners, a publicly traded independent oil and gas firm.
EIG is purchasing $350m of convertible preferred equity, and $650m of senior secured notes issued by Breitburn.
The preferred equity pays monthly dividends that equal 8% annually, and will give EIG an 18% voting interest in Breitburn. The company will also be allowed to appoint one director to Breitburn’s board.
Breitburn said the new notes, which mature in 2020 and pay a 9.25% annual interest rate, will rank senior to its existing debt, and any future unsecured debt.
The company intends to use $938m in net proceeds from the offerings to pay down borrowings under its credit facility of around $1.24bn.
Breitburn added that it is revising its borrowing base under the credit facility to $1.8bn through April 2016.
EIG chief executive officer Blair Thomas said: "We will work with Breitburn with the goal of creating significant value and distribution growth for unitholders, given the substantial liquidity our investment will provide and the growth opportunities available in the current market environment."
Breitburn focuses on the acquisition, development, and production of oil and gas properties across the US.
EIG has invested more than $18.5bn in the energy sector via over 300 projects or companies in 35 countries on six continents.