Gulf Finance downsizes term B to $1.15 billion, increases pricing

By Sara Rosenberg

New York, Aug. 12 – Gulf Finance LLC reduced its seven-year senior secured term loan B to $1.15 billion from $1.2 billion and increased pricing to Libor plus 525 basis points from talk of Libor plus 475 bps to 500 bps, according to a market source.

Also, the original issue discount widened to 97 from talk of 98.5 to 99 and the 101 soft call protection was extended to one year from six months, the source said.

In addition, the excess cash flow sweep was changed to 100% at more than 5x leverage, 75% at more than 3.5x leverage, 50% at more than 3x leverage and 25% at more than 2.5x leverage, from 75% with total net leverage based step-downs.

Furthermore, the debt-service coverage ratio was revised to 1.5x from 1.1x, leverage based asset-sale step-downs were removed, and the company will need to hold quarterly investor calls, the source continued.

The term loan still has a 1% Libor floor.

Morgan Stanley Senior Funding Inc., Barclays and Wells Fargo Securities LLC are the joint lead arrangers and bookrunners on the deal.

Recommitments are due at noon ET on Tuesday.

Proceeds will be used to refinance existing debt at Penn Products Terminals LLC and Chelsea Petroleum Products I LLC, to make a distribution to the sponsor and for general corporate purposes.

As a result of the term loan B downsizing, the dividend amount was decreased, the source added.

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