Regency Gas Services to launch $850 million facility Tuesday

By Sara Rosenberg

New York, July 13 - Regency Gas Services LP is scheduled to hold a bank meeting on Tuesday to launch its proposed $850 million credit facility, according to a market source.

The facility consists of a $250 million five-year revolver talked at Libor plus 200 basis points and a $600 million seven-year term loan B talked at Libor plus 225 bps, the source said.

UBS, Wachovia and Citigroup are the lead banks on the deal, with UBS the left lead on the term loan B and Wachovia the left lead on the revolver.

Proceeds will be used to help fund Regency Energy Partners LP's acquisition of TexStar Field Services, LP from affiliates of HM Capital Partners LLC in a transaction valued at $350 million, and to refinance existing debt.

The acquisition is expected to be immediately accretive to cash available for distribution and is expected to add about $40 million to 2007 EBITDA.

Closing is subject to regulatory approvals, including expiration of the required waiting period under the Hart-Scott-Rodino Antitrust Act, and other customary closing conditions.

Regency is a Dallas-based midstream master limited partnership. TexStar is a San Antonio-based midstream natural gas gathering, processing and treating company.

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