American Midstream repays revolver debt with proceeds from 8˝% notes

By Devika Patel

Knoxville, Tenn., March 12 – American Midstream Partners, LP completed an add-on to its 8˝% senior unsecured notes in 2017 and used the proceeds to repay borrowings under its revolver.

The company has reduced its revolver debt by over 20% since 2016.

“Last year, we successfully executed a $125 million add-on to our existing senior unsecured note,” senior vice president and chief financial officer Eric Kalamaras said on the company’s fourth quarter and year ended Dec. 31 earnings conference call on Monday.

“This transaction priced to yield 7.57% and net proceeds were used to reduce borrowings under our existing revolving credit facility.

“We have reduced our borrowings under our revolver by more than 20% since 2016 and have taken significant steps in positioning ourselves with capital flexibility to continue to execute on our strategies,” Kalamaras said.

Adjusted EBITDA was $176.4 million for the year ended Dec. 31, a decrease of 1% compared to 2016.

As of Dec. 31, the company had approximately $1.2 billion of total debt outstanding, comprised of $698 million outstanding under its revolving credit facility down approximately $190 million from 2016. At year-end, American Midstream had remaining borrowing capacity of approximately $178 million.

The company has $418 million outstanding under its 8˝% senior unsecured notes, including the $125 million add-on in December 2017 issued to yield 7.57%, as well as $88 million outstanding in non-recourse senior secured notes.

American Midstream had a consolidated total leverage ratio of about 5.3x at year end.

On Dec. 14, American Midstream Partners and American Midstream Finance Corp. priced an upsized $125 million add-on to their 8˝% senior notes due Dec. 15, 2021 at 102.375 to yield 7.596%.

The tap size was increased from $100 million.

The reoffer price came in the middle of the 102.25 to 102.5 price talk. Initial talk was 102.5.

Active bookrunner Wells Fargo Securities LLC was the left lead.

BofA Merrill Lynch, Barclays, Deutsche Bank Securities Inc. and RBC Capital Markets LLC were the passive bookrunners.

The Denver-based partnership, which owns, operates, develops and acquires natural gas midstream energy assets, used the proceeds to reduce borrowings under its revolving credit facility, which may be re-borrowed from time to time for general partnership purposes.

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