Crestwood cuts spread on $400 million term B to Libor plus 825 bps

By Sara Rosenberg

New York, March 20 - Crestwood Holdings LLC reduced pricing on its $400 million term loan B (Caa1/CCC+) to Libor plus 825 basis points from Libor plus 850 bps, according to sources.

The 1.5% Libor floor, original issue discount of 981/2, and call protection of 103 in year one, 102 in year two and 101 in year three were left unchanged.

Recommitments were due on Tuesday, sources added.

Bank of America Merrill Lynch, BNP Paribas Securities Corp., Citigroup Global Markets Inc., RBC Capital Markets LLC, RBS Securities Inc. and UBS Securities LLC are the lead banks on the deal.

Proceeds will be used to refinance existing debt and fund the acquisition of Antero Resources Appalachian Corp.'s Marcellus Shale gathering system assets located in Harrison and Doddridge counties, W.Va., for $375 million in cash.

The acquisition is being done through a joint venture between Crestwood Holdings and Crestwood Midstream Partners LP.

At closing, Crestwood Holdings will contribute about $244 million in exchange for its 65% ownership interest in the joint venture, while Crestwood Midstream will contribute around $131 million in exchange for its 35% ownership interest in the joint venture.

Crestwood Midstream is funding its joint venture contribution with available capacity under its existing $500 million credit facility.

In addition, the new joint venture will be getting a $200 million revolving credit facility to finance future capital requirements related to growth in the Area of Dedication, and the lead banks on Crestwood Holdings' term loan will participate in this revolver as well.

The transaction is expected to close this month but has a Jan. 1 effective date. It is subject to regulatory approvals and customary conditions.

Crestwood Holdings is a Houston-based energy company. Crestwood Midstream is a Houston-based midstream master limited partnership that owns and operates gathering, processing, treating and compression assets servicing natural gas producers.

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