Lehman Brothers and Citigroup are leading a $1.9 billion deal for EPCO Holdings. The facility consists of a three-year, $300 million revolver, a three-year, $600 million term loan "A" and a five-year, $1 billion term loan "B." Price talk is LIBOR plus 2 1/4% on the revolver and term loan "A" and LIBOR plus 2 1/2% on the term loan "B."
The loan will take out a $2.4 billion bridge loan put in place in February to fund EPCO's $1.1 billion acquisition of the general partner of TEPPCO Partners from Duke Energy Field Services, Texas Eastern Products Pipeline Co. The new facility will refinance the old deal with the remaining $500 million getting assigned to a subsidiary. Commitments for the new deal are due July 28. EPCO Holdings is a subsidiary of EPCO, a privately owned company controlled by Dan Duncan. Enterprise Products Partner is the general partner of EPCO.
"Duke Energy has been in the process of reorganizing and getting its balance sheet in shape for the last year and it looked at selling a number of assets and in selling its interest in TEPPCO partners and did that in February," said a spokeswoman for TEPPCO. Calls to Enterprise officials were not returned.
Moody's Investors Service assigned a first-time rating to EPCO Holdings, giving its credit facility a Ba3 rating.