May 27, 2015 [Business Wire] - Macquarie Infrastructure Company announced that its International-Matex Tank Terminals (IMTT) business has received binding commitments from lenders for the refinancing of the business’ existing credit facilities.
The refinancing is expected to close and fund on or about May 21 subject only to satisfaction of customary conditions precedent.
“We are pleased with the receptivity of the market to the refinancing of IMTT,” said James Hooke, chief executive officer of MIC and chairman of IMTT. “The combined new debt package lengthens the average tenor of IMTT’s debt facilities meaningfully and lowers IMTT’s cost of debt marginally while providing the business with the financial flexibility it needs in order to pursue important growth initiatives.”
The new debt package includes $325 million of senior notes maturing in May of 2025 and $275 million of senior notes maturing in May of 2027. The 10-year notes bear interest at a rate of 3.92% and the 12-year notes bear interest at a rate of 4.02%. Proceeds from the issuance of the notes will be used, in part, to repay the drawn balance on the existing credit facility.
IMTT has also entered into a new five year $600 million revolving credit facility. The facility bears interest at a variable rate based on the aggregate leverage of the business. At current levels, the first dollar of borrowing would be assessed interest at a rate of 1.93%. The revolving debt facility is expected to remain undrawn at closing.
IMTT’s existing tax exempt bond debt includes approximately $336 million of bonds backstopped by letters of credit that are, in turn, supported by undrawn capacity on the existing revolving credit facility. An additional $173 million of existing tax exempt bond debt does not require letters of credit. $473 million of the tax exempt bond debt will be repurchased and reissued to certain lenders under the new credit agreement and $36 million of the tax exempt bonds will be repurchased and a like amount will be newly issued. The average maturity of the combined new and reissued bonds is expected to increase to seven years from less than three years.
With no debt drawn on the revolving credit facility, the weighted average tenor of all drawn components of the debt package would be approximately 9.1 years. Assuming the revolving credit facility is fully drawn, the weighted average tenor of all the components of the debt package would be approximately 7.7 years.
JP Morgan served as the lead placement agent for the senior notes and SunTrust Robinson Humphrey and its affiliates served as the left lead arranger on both the tax exempt bond placements and the syndication of the new revolving credit facility.
