Tallgrass Energy Seeks $1.28 Billion Loan for Acquisition

Tallgrass Energy Partners LP will host a lender meeting Oct. 2 in New York to discuss $1.28 billion in loans the company is seeking to acquire Kinder Morgan Inc.’s interstate gas pipeline system, according to a person with knowledge of the transaction.

Barclays Plc is arranging the financing, which consists of an $875 million, six-year term loan, a six-year $250 million delayed-draw term loan that will be available for 18 months and a $150 million revolving line of credit maturing in five years, said the person, who asked not to be identified because the information is private.

Proceeds will also be used to acquire 50 percent of the Rockies Express Pipeline as well as other pipeline assets from Kinder Morgan, the person said. Leverage, or debt to earnings before interest, taxes, depreciation and amortization, will be 3.2 times, the person said.

Tallgrass, based in Overland Park, Kansas, is owned by its management as well as private-equity firm Kelso & Co. and a group of investors led by the Energy & Minerals Group. Tallgrass Chief Executive Officer David G. Dehaemers Jr. is a former chief financial officer at Kinder Morgan. John T. Raymond, the founder of Houston-based Energy & Minerals Group, served as a vice president at Kinder Morgan.

Doug Johnson, a spokesman for Tallgrass Energy Partners, didn’t immediately respond to an e-mail seeking comment.

To contact the reporter on this story: Michael Amato in New York at mamato3@bloomberg.net

To contact the editor responsible for this story: Chapin Wright at cwright4@bloomberg.net

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