Alon USA to get new credit facility for Paramount Petroleum purchase

By Sara Rosenberg

New York, May 1 - Alon USA Energy Inc. has received a commitment from Credit Suisse for a new credit facility that will be used to help fund the acquisition of Paramount Petroleum Corp., company officials said in a conference call Monday.

The company anticipates that the senior secured credit facility will have an about seven-year maturity, 1% amortization per annum and a cash sweep, officials said.

Leverage on a net basis is expected to be in the range of 50%.

"With the cash flow from this, we'll be completely delivered, according to our plan, on a net basis by 2009," officials added in the call.

Under the acquisition agreement, Alon USA will pay $307 million for all equity interests in Paramount and assume about $100 million of debt, net of cash.

The transaction is targeted to close late this month, following regulatory approvals.

Alon USA also announced on Monday that it has agreed to acquire Edgington Oil Co. for about $52 million in cash plus an amount to be determined for the value of inventory. This transaction is also targeted for a late-May close, following regulatory approvals.

Alon USA is a Dallas-based independent refiner and marketer of petroleum products. Paramount Petroleum is a Paramount, Calif.-based manufacturer, producer and distributor of asphalt products. Edgington is a Long Beach, Calif.-based heavy crude refining company.

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