Western Refining to use cash to pay down newly refinanced term loan

By Aleesia Forni

Columbus, Ohio, Nov. 30 - Western Refining Inc. has roughly $320 million outstanding under its term loan facility, and one of the company's top priorities is paying down this debt.

"That's what we view as our prepayable debt on the balance sheet, so any free cash flow we have that we can't use it for anything else, we'll use it to repay the term loan," treasurer and director of investor relations Jeff Beyersdorfer said during the company's presentation at the Bank of America Merrill Lynch Leveraged Finance Conference on Wednesday.

The company refinanced this term loan earlier in the year, extending its maturity to 2017.

Western Refining is also "happy with the execution" of its revolver renewal, which the company completed in September.

Beyersdorfer said the company uses this facility primarily for letters of credit.

Western Refining also plans to expend roughly $290 million of cash related to the redemption of all of its outstanding $275 million of senior secured floating-rate notes on Dec. 21.

The company's 11¾% senior secured notes are a "very expensive piece of paper" and one Beyersdorfer would "like out of the capital structure."

"With the high-yield market being fairly robust, it comes and goes as everyone knows, but if we find a window, we may decide to issue a new piece of paper and use those proceeds plus cash on hand to tender for the 11¾% [notes]," Beyersdorfer said.

"That doesn't help us out from necessarily a balance sheet perspective, but it certainly helps us out from an income statement perspective by reducing interest rates."

The company also plans to take out its "benign" senior convertible notes with cash at maturity in 2014.

Beyersdorfer also said the company aims to achieve a BB credit rating in the near future.

Western Refining is an independent refining and marketing company based in El Paso, Texas.

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