Brand Energy & Infrastructure Services Inc. proposed terms on a $1.23 billion loan backing its buyout by Clayton, Dubilier & Rice, while Western Refining Inc. is seeking $550 million in debt for its purchase of private-equity-owned interests in Northern Tier Energy LP.
Brand Energy proposed paying 3.5 percentage points to 3.75 percentage points more than the London interbank offered rate for the seven-year loan, according to a person with knowledge of the transaction, who asked not to be identified because terms aren’t set. Libor, the variable benchmark rate for leveraged loans, will have a one percent minimum.
Clayton, Dubilier & Rice agreed to buy Brand Energy, a provider of scaffolding and other services to the oil and gas and power generation sectors, from private-equity firm First Reserve for undisclosed terms, according to a company statement in September. Investors participating in the financing must submit their commitments by Nov. 21, the person with knowledge of the transaction said.
Western Refining, which agreed to buy ownership stakes in Northern Tier from Acon Investments and TPG Capital for $775 million, financed the deal with a $550 million term loan, according to a statement today. El Paso, Texas-based Western said the debt was arranged by Bank of America Corp. and UBS AG, and that it also used $245 million in cash to fund the purchase.
Northern Tier’s assets are in the upper Midwest region of the U.S. The company has a refinery in St. Paul Park, Minnesota, holds a 17 percent stake in a crude oil pipeline and operates convenience stores under the SuperAmerica retail brand, according to the statement.
Prices of high-yield, high-risk loans were little changed at 98.34 cents on the dollar today, according to Standard & Poor’s/LSTA U.S. Leveraged Loan 100 index. The floating-rate debt has returned 4.5 percent this year through Nov. 11, data from the index show, compared with about 6 percent for junk loans.
Patriot Coal Corp. set a Nov. 14 meeting with lenders for a $375 million loan to back its exit from bankruptcy, according to a person with knowledge of the transaction, who asked not to be identified because terms aren’t set. The company won court approval Nov. 6 for the terms of a reorganization that will allow it to leave bankruptcy with fewer retiree obligations, saving $130 million annually for the next four years.
U.S. Bankruptcy Judge Kathy Surratt-States in St. Louis approved the company’s disclosure statement, which gives creditors the details of the exit plan so they can vote on it. The plan includes an agreement with Peabody Energy Corp. that will compensate retired miners for health-care benefits, which the judge also approved.