Energy Transfer upsizes term loan to $850 million, trims pricing

By Sara Rosenberg

New York, March 3 – Energy Transfer Equity LP lifted its first-lien term loan (Ba2/BB/BB+) due Dec. 2, 2019 to $850 million from $500 million and reduced pricing to Libor plus 325 basis points from talk of Libor plus 350 bps to 375 bps, according to a market source.

Also, the 101 soft call protection on the term loan was shortened to six months from one year, the source said.

The term loan still has a 0.75% Libor floor and an original issue discount of 99.

Covenants include maximum leverage and minimum interest coverage ratios.

Recommitments were due at noon ET on Tuesday, the source continued.

Credit Suisse Securities (USA) LLC, Bank of Tokyo-Mitsubishi, BBVA Compass, BNP Paribas Securities Corp., Credit Agricole Securities (USA) Inc., DNB Bank, Mizuho Securities USA Inc., Sumitomo Mitsui Banking Corp., Intesa Sanpaolo, Natixis Securities North America Inc., ING Capital LLC, ABN Amro Inc., SunTrust Robinson Humphrey Inc., PNC Capital Markets LLC and HSBC Securities (USA) Inc. are the leads on the deal.

Proceeds will be used to help fund the transfer of 30.8 million Energy Transfer Partners LP common units, Energy Transfer Equity’s 45% interest in the Dakota Access Pipeline and Energy Transfer Crude Oil Pipeline (the Bakken pipeline project) and $879 million in cash (less amounts funded prior to closing for capital expenditures for the Bakken pipeline project) in exchange for 30.8 million newly issued class H units of Energy Transfer Partners.

The new class H units, when combined with the 50.2 million previously issued class H units, generally entitle Energy Transfer Equity to receive 90.05% of the cash distributions and other economic attributes of the general partner interest and IDRs of Sunoco Logistics.

In addition, because of the term loan upsizing, the company will pay down revolving credit facility borrowings, the source added.

Closing is expected this month.

Energy Transfer is a Dallas-based midstream oil and gas company.

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