GIP II Blue prices $100 million add-on term loan B via Morgan Stanley

By Sara Rosenberg

New York, July 19 – GIP II Blue Holding LP (HESM Holdco) priced on Wednesday a fungible $100 million add-on senior secured term loan B due Sept. 29, 2028 (Ba3/BB-), according to a market source.

Pricing on the add-on term loan is SOFR+CSA plus 450 basis points with a 1% floor.

CSA is ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

The add-on term loan has amortization of 1% per annum, a 1.05x debt service coverage ratio covenant, and an asset sale sweep of 50%, stepping up to 100% if total net leverage is greater than 3.5x.

In addition, the add-on term loan has an excess cash flow sweep through 2024 of 50% at more than 3.5x leverage, 25% at more than 2.5x leverage and 0% at less than 2.5x leverage, and in 2025 through 2028 of 75% at more than 3.5x leverage, 50% at more than 2.5x leverage, 25% at more than 1.5x leverage and 0% at less than 1.5x leverage, the source continued.

Morgan Stanley Senior Funding Inc. is the sole bookrunner on the deal and the administrative agent.

Proceeds will be used to pay a special cash distribution.

Closing is expected on Friday.

Pro forma for the transaction, the term loan will total $670,840,467.42.

GIP II, owned by Global Infrastructure Partners, is the owner of general partner and equity unit ownership interests in Hess Midstream LP and its operating subsidiary, Hess Midstream Operations LP.

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