Houston Fuel Oil sets talk on $625 million credit facility with launch

By Sara Rosenberg

New York, July 17 – Houston Fuel Oil Terminal Co. released price talk on its $625 million senior secured credit facility (Ba2) in connection with its Thursday bank meeting, according to a market source.

The $75 million five-year revolver is talked at Libor plus 300 basis points with no Libor floor and a par offer price, and the $550 million seven-year covenant-light term loan B is talked at Libor plus 325 bps to 350 bps with a 1% Libor floor and an original issue discount of 99, the source said.

The term loan has 101 soft call protection for one year and amortization of 1% per annum.

Included in the revolver is a maximum total adjusted net leverage ratio covenant, springing at 25% usage, the source continued.

Morgan Stanley Senior Funding Inc., Deutsche Bank Securities Inc. and Bank of America Merrill Lynch are the lead banks on the deal.

Proceeds will be used to refinance Prudential notes, an existing revolver and term loan borrowings.

Commitments are due on July 31, with closing expected in mid-August, the source added.

Houston Fuel (formerly Buffalo Gulf Coast Terminals LLC) is a Houston-based marine terminal for storage of residual fuel oil and crude oil.

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