| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers T > Headlines for TECO Energy Inc. > News item |
TECO Energy gets bridge loan commitment for New Mexico acquisition
By Sara Rosenberg
New York, May 28 - TECO Energy Inc. has received a commitment for a bridge loan to back its purchase of New Mexico Gas Co. from Continental Energy Systems LLC, company officials said in a conference call on Tuesday.
The total purchase is $950 million, including the assumption of $200 million of senior secured notes at New Mexico Gas.
The size of the bridge loan is big enough to cover the notes if they are put due to the change of control, but it is anticipated that the notes will remain outstanding, officials remarked.
In an 8-K filed with the Securities and Exchange Commission, the company revealed that the 364-day senior bridge loan commitment is for $1,075,000,000.
Pricing on the bridge loan is based on ratings and can range from Libor plus 125 bps to 200 bps for the first 89 days, Libor plus 150 bps to 225 bps from days 90 through 179, Libor plus 175 bps to 250 bps from days 180 through 269, and Libor plus 200 bps to 275 bps from day 270.
The bridge loan has a 20 bps commitment fee starting on the date that the loan is executed, stepping up to 25 bps on day 270, and a duration fee of 50 bps for 90 days, 75 bps for days 91 through 180, and 100 bps on day 270.
Morgan Stanley Senior Funding Inc. is the lead bank on the bridge loan.
Permanent financing for the transaction is expected to come from a common equity issuance by TECO, a long-term debt issuance at New Mexico Gas and cash on hand.
Closing is expected in the first quarter of 2014, subject to state and federal regulatory approvals. No shareholder approval is required to complete the transaction.
TECO is a Tampa, Fla.-based energy-related holding company.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.