Targa Resources to increase, draw on revolver to fund acquisition; parent will pay down term loan

By Angela McDaniels

Tacoma, Wash., July 28 - Targa Resources Partners LP will draw $397.5 million under its senior secured revolving credit facility to help fund its $530 million acquisition of Targa Resources, Inc.'s natural gas liquids business, according to a company news release.

The company said it is seeking commitment increases under the accordion feature of its existing $850 million revolver. It has received $127.5 million of additional commitments and expects to close the increase on Wednesday, which would bring total commitments under the revolver to $977.5 million.

As of June 30 and after giving effect to the July 6 closing of the company's 11¼% senior unsecured notes due July 2017, pro forma borrowings under the revolver were $216.4 million.

The remainder of the acquisition will be paid in the form of newly issued common and general partner units of Targa Resources Partners.

Targa will use the $397.5 million of cash it receives from Targa Resources Partners to repay a portion of its senior secured term loan due October 2012. The outstanding term loan balance was $515.9 million as of June 30.

Targa Resources Partners was formed by Targa to gather, compress, treat, process and sell natural gas and to fractionate and sell natural gas liquids and natural gas liquids products. The companies are based in Houston.

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