Energy Transfer enters $6.05 billion 364-day senior bridge term loan

By Marisa Wong

Morgantown, W.Va., Sept. 29 – Energy Transfer Equity, LP entered into a bridge commitment letter on Monday with Morgan Stanley Senior Funding, Inc., Citigroup Global Markets Inc., Deutsche Bank AG Cayman Islands Branch, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, JPMorgan Chase Bank, NA, Royal Bank of Canada, UBS AG, Stamford Branch and UBS Securities LLC for a $6.05 billion 364-day senior bridge term loan credit facility, according to an 8-K filing with the Securities and Exchange Commission.

The new debt will be used to finance Energy Transfer affiliate Energy Transfer Corp. LP’s acquisition of Williams Cos., Inc. The transaction is valued at $37.7 billion, as previously noted. Other sources of funding will include a $634 million draw on Energy Transfer’s existing revolver and about $27 billion of Energy Transfer Corp. shares.

Interest for the bridge loan is equal to adjusted Libor plus 150 basis points. The applicable margin steps up to 250 bps 270 days after the closing date and to 350 bps 360 days after the closing date. The interest rate is capped at 5.5%.

The company may choose to extend the maturity date of the facility to 24 months after the closing date, subject to a term-out fee.

Dallas-based Energy Transfer Equity is a master limited partnership that owns the general partner and 100% of the incentive distribution rights of Energy Transfer Partners, LP and energy gathering and transportation company Sunoco, LP.

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