UBS Warburg is preparing to launch syndication of a $450 million credit backing TransMontaigne's acquisition of the Florida petroleum operations from El Paso Corp. The new facility consists of a three-year, $250 million revolver and a three-year, $200 million term loan, which increases the company's existing credit line by $150 million. FleetBoston Financial led the previous facility. A banker familiar with the new deal said it is still too early to determine pricing, but that the deal would be syndicated in early April. A UBS official declined to comment.
The new credit is the first that UBS has underwritten for TransMontaigne, a Denver, Co.-based provider of services for the transportation, storage and marketing of petroleum chemical products. Although the company's current management has previous relationships with UBS, the bank has not been a lender to the company in the past, noted Randal Larson, TransMontaigne's cfo. "In light of the Florida acquisition, we were looking to expand our banking facilities," he said on the switch of lead banks to UBS. "We received different alternatives and they were the most attractive to us." He declined to comment further on the change of banks.
Larson said in addition to funding the acquisition, the new line will also repay the company's existing bank debt. The previous deal, a $300 million revolver, carried pricing of LIBOR plus 21/2% and was set to expire in June 2005.