Tallgrass Energy Partners extends revolver to 2022, reduces interest

By Angela McDaniels

Tacoma, Wash., June 5 – Tallgrass Energy Partners, LP amended and restated its $1.75 billion revolving credit facility to extend the maturity date to June 2, 2022 from May 13, 2018, reduce the interest rate and relax some covenants, according to an 8-K filing with the Securities and Exchange Commission.

The initial interest rate is Libor plus 175 basis points. The margin over Libor ranges from 150 bps to 250 bps depending on the company’s total leverage ratio.

The initial commitment fee is 30 bps. The fee ranges from 25 bps to 50 bps, depending on the company’s total leverage ratio.

If the company becomes investment grade, the margin over Libor will range from 112.5 bps to 200 bps, and the commitment fee will range from 17.5 bps to 37.5 bps, both depending on the company’s ratings.

The amended and restated credit agreement also provides that if Tallgrass becomes investment grade, the liens securing the revolver will be automatically released and some restrictive covenants will be significantly relaxed or cease to apply.

As of Friday, the company had borrowed $1.24 billion under the revolver. The remaining commitments are available for capital expenditures and permitted acquisitions, to provide for working capital requirements and for other general partnership purposes.

The amended revolver has a $250 million accordion feature, a $60 million sublimit for swingline loans and a $75 million sublimit for letters of credit.

The revolver requires maintenance of a consolidated leverage ratio of not more than 5 to 1, which will be increased to 5.5 to 1.0 for certain measurement periods following the certain acquisitions; a consolidated senior secured leverage ratio of not more than 3.75 to 1.00 and a consolidated interest coverage ratio of not less than 2.5 to 1.0.

Wells Fargo Bank, NA is the administrative agent and collateral agent.

Tallgrass Energy is a midstream energy operator based in Leawood, Kan.

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