Magellan Midstream enters $500 million 364-day credit facility

By Marisa Wong

Morgantown, W.Va., May 22 – Magellan Midstream Partners, LP entered into a $500 million 364-day credit agreement on May 17, according to an 8-K filing with the Securities and Exchange Commission.

Wells Fargo Securities, LLC and JPMorgan Chase Bank, NA are joint bookrunners and lead arrangers with Wells Fargo Bank, NA as administrative agent and JPMorgan Chase Bank as syndication agent.

The credit facility will mature on May 15, 2020.

The credit facility includes a term out option, exercisable no later than 30 days prior to the termination date. The company may elect to have all outstanding borrowings converted into a term loan 24 months after the termination date, subject to a term-out fee.

Borrowings will bear interest at Libor plus an applicable margin based on the company’s senior unsecured long-term debt ratings. The applicable margin ranges from 100 basis points 125 bps.

The commitment fee, also based on ratings, ranges from 7.5 bps to 12.5 bps.

The credit agreement includes covenants limiting the ratio of consolidated debt to consolidated EBITDA to not more than 5.00 to 1.00, subject to temporary increases in connection with material acquisitions.

In addition, on May 17 Magellan amended its amended and restated credit agreement dated Oct. 26, 2017 to, among other things, extend the maturity date to May 17, 2024 and include customary Libor replacement language.

The energy transportation, storage and distribution company is based in Tulsa, Okla.

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