Hess Midstream obtains $1 billion revolver, $400 million term loan

By Rebecca Melvin

New York, Dec. 17 – Hess Midstream Partners LP has entered into senior secured credit facilities with JPMorgan Chase Bank NA as administrative agent and with several other lenders, comprising a $1 billion five-year revolving credit facility and $400 million five-year term loan.

The company has the option to extend the revolver and the term loan for two additional one-year terms subject to conditions. In addition, the partnership may increase the revolver and term loan by up to an additional $500 million with the consent of lenders whose commitments will be increased. Included in the total capacity are sub-facilities for swingline loans and letters of credit for up to $100 million and $350 million, respectively.

Borrowings under the revolver will bear interest at the eurodollar rate plus the applicable margin or at the alternate base rate plus the applicable margin.

Prior to the company obtaining an investment-grade credit rating, the pricing levels for the facility fee and interest-rate margins are based on the company’s ratio of total debt to EBITDA.

The company’s obligations under the credit facilities will be unconditionally guaranteed by each direct and indirect wholly owned material domestic subsidiary of the partnership, and will be secured by first priority perfected liens on substantially all the presently owned and after-acquired assets of the partnership and its direct and indirect wholly owned material domestic subsidiaries, including equity interests directly owned by such entities, subject to certain customary exclusions.

The credit facilities contain representations and warranties, affirmative and negative covenants and events of default that the partnership considers to be customary for an agreement of this type, including a covenant that requires the partnership to maintain a ratio of total debt to EBITDA for the prior four fiscal quarters of not greater than 5 to 1 as of the last day of each fiscal quarter (5.5 to 1 during the specified period following certain acquisitions) and, prior to the partnership obtaining an investment-grade credit rating, a ratio of secured debt to EBITDA for the prior four fiscal quarters of not greater than 4 to 1 as of the last day of each fiscal quarter.

In addition to JPMorgan, Citibank NA, MUFG Bank Ltd., Wells Fargo Securities LLC, Goldman Sachs Lending Partners LLC and Morgan Stanley Senior Funding Inc. are the joint lead arrangers and joint bookrunners for the credit facilities.

The $1.4 billion of credit facilities was obtained in conjunction with issuing $500 million of senior notes to help fund its acquisition of Hess Corp.’s and Global Infrastructure Partners’ ownership interests in Hess Infrastructure Partners LP.

In conjunction with the transaction, about $350 million in existing borrowings under Hess Infrastructure’s credit facilities will be retired and Hess Midstream will assume about $800 million of outstanding Hess Infrastructure notes in a par-for-par exchange.

Hess Midstream is a Houston-based midstream company.

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