Stonewall Gas Gathering launches $350 million term loan B to investors

By Sara Rosenberg

New York, Jan. 7 – Stonewall Gas Gathering LLC launched a $350 million seven-year senior secured term loan B at its bank meeting on Wednesday, according to a market source.

Citigroup Global Markets Inc., BMO Capital Markets and Bank of America Merrill Lynch are the lead arrangers on the deal.

The term loan is talked at Libor plus 650 basis points with a 1% Libor floor and an original issue discount of 98, the source said.

Also, the loan is non-callable for one year, then has a 101 soft call for one year.

Amortization on the term loan is 1% per annum.

Financial covenants include a debt to EBITDA ratio.

Security is a first priority lien on substantially all the present and future tangible and intangible assets of the borrower and equity interests.

Mandatory Prepayments are 100% of debt issuance, 100% of insurance proceeds, 100% of asset sales, and 100% of excess cash flow, subject to step-downs.

Proceeds will be used to fund the construction costs and construction period debt service associated with the development of the Stonewall Gas system and to pay related fees and expenses.

A segregated construction account will be established at closing into which all the proceeds of the term loan will be deposited to fund scheduled principal and interest through first quarter 2017 and the Stonewall construction costs.

Commitments are due on Jan. 16, the source added.

Closing is targeted for Jan. 22.

Stonewall Gas is a critical gas gathering pipeline system in the Southwest Marcellus shale that is being developed by M3 Midstream LLC.

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