SemGroup $300 million add-on to launch next week

By Sara Rosenberg

New York, May 2 - SemGroup LP plans on holding a bank meeting next week, although a specific date has not yet been set, to launch $300 million of incremental bank debt for syndication to new and existing lenders, a company spokesman told Prospect News on Monday.

Banc of America Securities LLC is the lead arranger and bookrunner on the deal.

The $300 million add-on is comprised of a $100 million increase to the existing $625 million working capital revolving credit facility and a $200 million increase to the existing $375 million term loan B.

Pricing on the additional bank debt is still to be determined. The company's existing term loan B is priced with an interest rate of Libor plus 225 basis points.

"We hope that the add-on will be priced in line with what we have now or better but we won't know that for like a month or so," the spokesman said.

The company's existing facility also includes a $50 million revolver for general corporate purposes that will be left unchanged.

Proceeds from the add-on will be used to finance the Tulsa, Okla., midstream service company's acquisition of Koch Pavement Solutions' asphalt operations and assets located in the United States and Mexico. The transaction is expected to close in the second quarter.

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