Energy Transfer Equity launches syndication of $2.3 billion facility

By Angela McDaniels

Tacoma, Wash., Feb. 16 - Energy Transfer Equity, LP launched the syndication of a new senior secured credit facility of up to $2.3 billion, according to a company news release.

The new facility is being pursued in connection with the company's planned acquisition of Southern Union Co. The ultimate size is subject to how many Southern Union shareholders elect to receive cash in exchange for their shares.

Energy Transfer Equity is offering $44.25 in cash or one common unit per Southern Union share. Up to 60% of the $5.7 billion total consideration will be paid in cash.

The new facility and the acquisition are expected to close during the first quarter.

Subsidiary Energy Transfer Partners, LP will buy Southern Union's 50% interest in Citrus Corp., which owns 100% of the Florida Gas Transmission pipeline system and is jointly owned by Southern Union and El Paso Corp., for $2 billion.

Energy Transfer Equity plans to use the proceeds of the new facility and a portion of the proceeds of the Citrus transaction to fund the cash portion of its acquisition of Southern Union, to pay related fees and expenses, including existing borrowings under Energy Transfer Equity's revolving credit facility, and for general partnership purposes.

The company expects the new facility and the proceeds of the Citrus transaction to replace its $3.7 billion bridge loan with permanent financing.

Dallas-based Energy Transfer Equity is the parent company of Energy Transfer Partners and Regency Energy Partners LP, both of which are master limited partnerships engaged in energy-related services.

Houston-based Southern Union transports, stores, gathers, processes and distributes natural gas.

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