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Veresen Midstream talks $600 million term loan B at Libor plus 500 bps
By Sara Rosenberg
New York, Feb. 5 – Veresen Midstream LP set talk on its $600 million seven-year term loan B (Ba3/BB-) at Libor plus 500 basis points with a 1% Libor floor and an original issue discount of 98, according to a market source.
The term loan has 101 soft call protection for one year, the source said.
Commitments are due on Feb. 18.
RBC Capital Markets, TD Securities (USA) LLC and HSBC Securities (USA) Inc. are the leads on the deal that launched with a bank meeting on Wednesday.
Proceeds from the term loan B will be used to fund the acquisition of certain natural gas gathering and compression assets supporting Montney development in the Dawson area of northeastern British Columbia from Encana Corp. and the Cutbank Ridge Partnership for $600 million, plus actual costs accrued in 2015.
The company’s proposed senior secured credit facility also includes a C$75 million revolver that will be available for operating and working capital requirements and a C$1,275,000,000 non-revolving expansion facility that will be largely undrawn initially and available to fund future growth.
Veresen Midstream is a joint venture being formed by Veresen Inc. and Kohlberg Kravis Roberts & Co. LP.
Veresen will fund its interest in Veresen Midstream by contributing its Hythe/Steeprock gathering and processing assets valued at $920 million, and in exchange will receive from Veresen Midstream $420 million, resulting in a 50% equity position valued at $500 million.
KKR will fund its 50% interest in Veresen Midstream by contributing $500 million in cash.
Closing is expected this quarter, subject to receipt of approvals under the Competition Act and the Investment Canada Act and other customary conditions.
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