Tallgrass Energy lowers revolver to $2.25 billion, reduces interest

By Wendy Van Sickle

Columbus, Ohio, July 27 – Tallgrass Energy Partners, LP amended its revolving credit facility on Thursday to, among other things, increase availability to $2.25 billion, according to an 8-K filing with the Securities and Exchange Commission.

The amendment also reduced the applicable margin to range from Libor plus 125 basis points to 225 bps depending on the company’s total leverage ratio. The current margin is 137.5 bps, down from 175 bps prior to the amendment.

If and when the partnership achieves certain credit ratings, including an investment grade rating by at least one ratings agency, the margin above Libor will fall to 112.5 bps to 175 bps.

The commitment fee range was also reduced, and the initial commitment fee is 30 bps. After delivery of the partnership's financial statements for the period ending Sept. 30, the commitment fee will range from 25 bps to 37.5 bps, based on total leverage ratio. If and when the partnership achieves the specified credit ratings, the commitment fee will drop to range from 12.5 bps to 35 bps, based on the partnership's credit ratings.

The amendment also modifies the use of proceeds to allow the partnership to pay off the Tallgrass Equity revolving credit facility and increases the maximum total leverage ratio to 5.5 times.

Wells Fargo Securities, LLC is the bookrunner and a lead arranger along with Citigroup Global Markets, Inc., RBC Capital Markets, Capital One, NA, Bank of American Merrill Lynch, PNC Bank, NA, TD Securities (USA) LLC, Bank of Nova Scotia and Barclays Bank plc.

Capital One and PNC are the syndication agents; Citigroup, RBC, Toronto-Dominion Bank, New York Branch, Bank of America Merrill Lynch, Bank of Nova Scotia and Barclays are the documentation agents.

Wells Fargo Bank, NA is the administrative agent.

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

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