Tres Palacios Gas Storage to launch roughly $307.5 million credit facility on Friday

By Sara Rosenberg

New York, June 25 - Tres Palacios Gas Storage LLC is scheduled to hold a bank meeting on Friday to launch its proposed about $307.5 million senior secured credit facility, according to a market source.

Credit Suisse is the lead bank on the deal.

The facility consists of an about $137.5 million 18-month delayed-draw, with 61/2-year final maturity, asset-based term loan that is fully hedged on a broad-based gas hedge and an about $170 million 61/2-year term loan against the gas storage facilities, the source said.

Final tranche sizes will be determined by hedging activity.

Price talk on both tranches is Libor plus 325 basis points with an original issue discount of 99, the source added.

Proceeds will be used to fund the construction of Tres Palacios, a new natural gas storage facility in Matagorda and Wharton County, Texas.

Tres Palacios will be converting three currently developed salt caverns to natural gas storage services, resulting in 35.6 Bcf of working gas capacity.

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