Stonewall ups talk on $350 million term B to Libor plus 775-800 bps

By Sara Rosenberg

New York, Jan. 21 – Stonewall Gas Gathering LLC raised price talk on its $350 million seven-year senior secured term loan B (B) to Libor plus 775 basis points to 800 bps from Libor plus 650 bps, according to a market source.

In addition, the original issue discount on the term loan widened to 95 from 98, the source said.

Also, the loan is now non-callable for one year, then has hard call protection of 102 in year two and 101 in year three, as opposed to being non-callable for one year, then having a 101 soft call for one year.

And, it was outlined that the incremental facility can only be used for expansionary capital expenditures and is subject to 50 bps MFN with no sunset provision, the source continued.

The term loan still has a 1% Libor floor, a debt to EBITDA covenant and amortization of 1% per annum.

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.

Recommitments were due at noon ET on Wednesday, the source added.

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

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.

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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