NorthRiver further tightens pricing on $1 billion term loan, trims OID

New York, Sept. 25 – NorthRiver Midstream Finance LP again tightened pricing on its $1 billion seven-year senior secured covenant-light term loan B (Ba3/BB+), narrowing the original issue discount to 99.75 from 99.5, according to a market source.

On Monday the issuer reduced the coupon to Libor plus 325 basis points from talk of Libor plus 375 bps.

The loan continues to have a 0% Libor floor.

Recommitments were due at 2 p.m. ET on Tuesday.

In other changes on Monday, the MFN sunset was extended to 18 months from six months and the threshold of 3.5 times total net leverage included in the requirement for mandatory prepayments after asset sales has been removed.

When the loan was announced, the borrower was Grizzly Acquisitions Inc. with Grizzly Operations LP and Grizzly Finco (USA) as co-borrowers.

Grizzly Acquisitions launched the loan on Sept. 7.

The term loan has 101 soft call protection for six months and amortization of 1% per annum.

Incremental is unlimited as long as pro forma secured net leverage does not exceed 4.5 times plus the available incremental amount of C$200 million.

Mandatory prepayments are from 100% of net cash proceeds from asset sales, subject to customary reinvestment rights, 100% of debt issuance proceeds, and 75% of excess cash flow sweep with step-downs to 50% if secured net leverage is less than 5 times but more than 4.25 times, 25% if secured net leverage is less than 4.25x but more than 3.5 times and 0% if secured net leverage is less than 3.5 times.

NorthRiver Midstream Operations LP and NorthRiver Midstream Finance LLC are co-borrowers.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, HSBC Securities (USA) Inc., CIBC, RBC Capital Markets and Bank of Nova Scotia are the joint lead arrangers on the deal. Citigroup is the administrative agent.

Proceeds will be used to help fund the acquisition of Enbridge Inc.’s Western Canadian midstream business by Brookfield Infrastructure for a cash purchase price of C$4.31 billion, subject to customary closing adjustments and receipt of regulatory approvals.

A portion of the transaction is expected to close in late September/early October and the remainder is expected to close in the fourth quarter through third quarter 2019 timeframe.

The Toronto-based company owns and operates assets in the utilities, transport, energy and communications infrastructure sectors across North and South America, Asia Pacific and Europe.

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