Targa Resources firms $430 million term loan at Libor plus 475 bps

By Sara Rosenberg

New York, Feb. 11 – Targa Resources Corp. finalized pricing on its $430 million seven-year senior secured covenant-light term loan at Libor plus 475 basis points, the wide end of the Libor plus 450 bps to 475 bps talk, according to a market source.

In addition, the original issue discount on the term loan widened to 98¼ from 98½, the source said.

As before, the term loan has a 1% Libor floor and 101 soft call protection for one year.

Allocations are expected on Thursday, the source added.

The company’s $1.1 billion credit facility (Ba3/B+) also includes a $670 million revolver.

Bank of America Merrill Lynch, RBS Securities Inc., Wells Fargo Securities LLC, ING and MUFG are the arrangers on the deal.

Proceeds will be used to help fund the acquisition of Atlas Energy LP following the spinoff of its non-midstream assets, to pay related fees and expenses and to refinance existing debt.

Under the agreement, Targa is buying Atlas Energy for $1,869,000,000, including 10.35 million shares valued at $1,259,000,000 based on the closing price of the company’s common stock on Oct. 10, 2014, and $610 million in cash.

Closing is expected this quarter, subject to the spinoff of the non-midstream assets and customary approvals and conditions.

Targa Resources is a Houston-based midstream energy company.

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