The UBS-led credit facility for Regency Gas Services was increased last week by $60 million. The revolver was increased by $60 million and $12 million was shifted from the second lien into the first lien. A banker said the move was caused by oversubscription.
The facility now consists of a $150 million revolver, a $260 million first-lien tranche and a $50 million second lien. Pricing has remained the same, set at LIBOR plus 2 3/4% on the revolver and first lien and LIBOR plus 6% on the second lien. Regency is a Dallas-based midstream gas gathering, processing and transmission company owned by Hicks, Muse, Tate & Furst.
The company had been amending and restating existing debt while adding $110 million to fund the build out of a gas pipeline when the deal launched at the end of June. When brought to market last month, it had consisted of a $90 million revolver, a $248 million first lien and a $62 million second lien (LMW, 7/1). UBS led the loans backing Hicks, Muse's $405 million acquisition of Regency from Charlesbank Capital Partners last November. These consist of a $40 million revolver, a $160 million first lien and an $80 million second lien (11/5).
In early June the company said it would extend an existing intrastate gas pipeline located in northern Louisiana. The project is expected to cost about $125 million with Hicks, Muse kicking in the other $15 million. Other extensions are expected to be completed by the end of 2005. The company is reportedly planning an initial public offering using a master limited partnership structure. Stephen Arata, executive v.p. and cfo, previously explained that amending and restating the credit is a simpler process than putting in place a new line (7/1). Arata did not respond to calls for this story.