Altus Midstream enters into $800 million five-year revolving facility

By Sarah Lizee

Olympia, Wash., Nov. 13 – Altus Midstream Co. entered into a credit agreement on Friday with JPMorgan Chase Bank, NA as administrative agent, providing for an up to $800 million five-year revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

Total commitments for the initial period will be $450 million until the consolidated net income of Altus Midstream and its restricted subsidiaries for three consecutive calendar months equals or exceeds $175 million on an annualized basis and Altus Midstream has raised at least $250 million of additional capital. After that, total commitments will be equal to $800 million.

There is an up to $100 million letter-of-credit subfacility and an up to $100 million swingline loan subfacility.

After the initial period, Altus Midstream may increase commitments up to a total of $1.5 billion by adding new lenders or obtaining the consent of any increasing existing lenders.

Borrowings may be made only in U.S. dollars.

The facility matures Nov. 9, 2023, with two one-year extension options.

Borrowings will bear interest at Libor plus 105 basis points to 142.5 bps based on leverage. Interest will change to Libor plus 90 bps to 150 and will be based on debt ratings once there is a long-term debt rating.

The facility fee will be 20 bps to 32.5 bps before there is a debt rating and 10 bps to 25 bps after.

During the initial period, the agreement requires a debt-to-capital ratio of not greater than 30% at the end of any fiscal quarter, determined by reference to the consolidated debt of Altus Midstream and its restricted subsidiaries to the consolidated partners’ equity of Altus Midstream and its restricted subsidiaries plus the consolidated debt of Altus Midstream and its restricted subsidiaries.

After the initial period, the agreement will require a leverage ratio of not greater than 5 to 1 at the end of any fiscal quarter, except that during up to one year following a qualified acquisition, the leverage ratio cannot exceed 5.5 to 1 at the end of any fiscal quarter.

JPMorgan, Wells Fargo Securities, LLC, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Inc., TD Securities (USA) LLC, MUFG Bank, Ltd. and Bank of Nova Scotia, Houston Branch are co-lead arrangers and joint bookrunners. Wells Fargo Bank, NA is the syndication agent.

Citibank, NA, Bank of America, NA, Toronto-Dominion Bank, New York Branch, MUFG Bank and Scotiabank are co-documentation agents.

Altus, formerly known as Kayne Anderson Acquisition Corp., is a Houston-based pure-play, Permian basin midstream C-corporation.

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