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Krotz Springs in market with $400 million ABL revolver
By Sara Rosenberg
New York, July 9 - Krotz Springs is currently in market with its $400 million ABL revolver, according to a market source.
Bank of America is the lead bank on the deal that launched this week.
The revolver is talked at Libor plus 200 basis points, with a 25 bps unused fee, the source said.
The revolver has a $100 million accordion feature to support ongoing working capital needs.
Under the original financing plans, the company's revolver was expected to be sized at $425 million with a $75 million accordion feature, and Wachovia was said to be arranging the deal.
Krotz Springs actually closed on the credit facility just a few days ago and proceeds were used to help fund Alon USA Energy, Inc.'s acquisition of the Krotz refinery from Valero Energy Corp. for $333 million in cash plus about $140 million for working capital, including inventories.
The $702 million credit facility also includes a $252 million six-year first-lien term loan (B1/B+) and a $50 million letter-of-credit facility (B1/B+) to support substantial hedging that are both priced at Libor plus 750 bps with a 3.25% Libor floor, and were sold at an original issue discount of 96. The debt is non-callable for one year, then at 101 in year two.
Credit Suisse acted as the lead bank on the term loan and letter-of-credit facility, syndication of which has already been completed.
During syndication, the term loan was upsized from $245 million, pricing on the term loan and the letter-of-credit facility was increased from Libor plus 550 bps and the original issue discount on the term loan and the letter-of-credit facility widened from an originally proposed 98 level.
Krotz Springs is an 85,000 barrel-per-day refinery located in Louisiana. Alon is a Dallas-based refiner and marketer of petroleum products.
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