Sunoco indirect units enter $2.5 billion loan at Libor plus 150 bps

By Wendy Van Sickle

Columbus, Ohio, Aug. 8 – Sunoco Logistics Partners LP indirect partially owned subsidiaries Dakota Access, LLC and Energy Transfer Crude Oil Co., LLC entered into a three-year, up to $2.5 billion term loan agreement on Aug. 2, according to an 8-K filing with the Securities and Exchange Commission.

Citigroup Global Markets Inc., MUFG, Mizuho Bank, Ltd. and TD Securities (USA) LLC acted as coordinating lead arrangers and joint bookrunners. Citibank, NA is the administrative agent.

Proceeds are available for the payment of project costs of the development, design, construction, testing and operation of a 1,172-mile crude oil pipeline from North Dakota to Patoka, Ill., and an in-field system with six receipt stations in the Bakken/Three Forks production area of North Dakota and a 749-mile crude oil pipeline from Patoka to Nederland, Texas, and all facilities.

The North Dakota-to-Illinois pipeline is awaiting governmental permits. Until those permits are issued, borrowings under the credit agreement are limited to $1.1 billion. On the closing date, the borrowers drew about $860.7 million under the credit agreement.

Borrowings initially bear interest at Libor plus 150 basis points, with the margin stepping up annually to a final level of 175 bps. The loan matures Aug. 2, 2019.

The borrowers are also required to pay quarterly commitment fees to each lender equal to 35% of the applicable margin multiplied by the unused portion of such lender’s commitments. In addition, on each of the 12-month, 18-month, 24-month and 30-month anniversary of the closing, the borrowers are required to pay duration fees in an amount equal to 0.25%, 0.3%, 0.6% and 0.6%, respectively, multiplied by the principal amount of loans outstanding under the credit agreement.

The borrowers’ obligations under the credit agreement are secured by liens on all assets of the borrowers and their subsidiaries as well as a pledge by each of the direct owners of the borrowers of their respective equity interests in the borrowers.

In addition to Sunoco, the borrowers are also partly owned by Energy Transfer Partners, LP and Phillips 66.

Energy Transfer Partners is an energy gathering and transportation company based in Dallas. Sunoco transports and stores crude oil and natural gas and is based in Philadelphia. Philipps 66 is a Houston-based energy manufacturing and logistics company.

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