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JPMorgan Chase Agents $1.375B Refi for Macquarie Infrastructure Corporation

December 17, 2018, 08:01 AM
Filed Under: infrastructure

Macquarie Infrastructure Corporation announced that it has completed the refinancing of the primary debt facility of its Atlantic Aviation subsidiary and extended the maturity of two of three facilities supporting its International-Matex Tank Terminals (“IMTT”) subsidiary. The Atlantic and IMTT transactions closed on December 6 and December 5, respectively.

“We are pleased with the support from existing and new lenders in the refinancing of our two largest businesses,” said Christopher Frost, chief executive officer of MIC. “The successful refinancing and amendment of these debt facilities further de-risks MIC by extending maturity dates, diversifying funding sources and providing a permanent solution to the refunding of our holding company level convertible notes that mature in July 2019. Together with the sale of BEC and other, smaller, non-core businesses in 2018, we have made substantial progress relative to our strategic priority of increasing the Company’s balance sheet strength and financial flexibility.”

The Atlantic refinancing replaces an existing term loan having an amortized principal balance of $375 million at closing and a $350 million revolving credit facility (undrawn), both with October 2021 maturities. The new facility consists ofa term loan of $1.025 billion maturing in December 2025 and a $350 million revolving credit facility ($35 million drawn at closing) maturing in December 2023.

According to an SEC filing JPMorgan Chase served as administrive agent.

The new loan bears interest at a rate of LIBOR plus 375 basis points. The revolving credit facility is subject to a leverage-based pricing grid with an opening pricing of LIBOR plus 225 basis points. The all-in cost of the loan will be reduced to approximately 5.6% by a 1.0% LIBOR rate cap on a notional $400 million of Atlantic debt.

In addition to repayment of the existing term loan, $350 million of loan proceeds are expected to be used to repay a like amount of holding company level convertible notes that mature in July of 2019. At closing, stand-alone leverage (net debt to trailing twelve month EBITDA at September 30) at Atlantic was approximately 4.0 times.

The IMTT amendment resulted in an extension of the maturity date for each of the business’ $600 million revolving credit facility and $509 million of tax exempt debt by three and a half years to December of 2023 and 2025, respectively. At closing, stand-alone leverage (net debt to trailing twelve month EBITDA at September 30) at IMTT was approximately 3.6 times.

Both of IMTT’s revolving credit and tax exempt facilities are subject to either a ratings based or leverage-based pricing grid. At closing, the pricing on the revolving credit facility was LIBOR plus 150 basis points, while pricing on the tax exempt debt was based on a formula of 80% times the sum of LIBOR plus 195 basis points. The pricing of the tax exempt debt is approximately 40 basis points lower than the pricing prior to the refinancing.

Including the refinancing and amendment of the Atlantic and IMTT facilities, the weighted average maturity of all debt facilities across MIC has increased to 6.3 years from the 5.1 years at October 30 reported in the Company’s financial results for the third quarter of 2018.

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