Lehman Brothers is in the market with a seven-year, $250 million term loan for Magellan Midstream Holdings. Proceeds are being used to refinance the company's existing credit and pay a dividend of around $150 million to its owners. Magellan is a master limited partnership that was formed by Madison Dearborn Partners and Carlyle/Riverstone Global Energy and Power Fund to acquire interests in Williams Energy Partners. Magellan transports, stores and distributes refined petroleum products and ammonia.
John Chandler, cfo of Magellan, said the company is pursuing the refinancing because of "an attractive pricing environment." He referred questions on the spread to Lehman bankers, who did not return calls. The existing loan is reportedly priced at LIBOR plus 2 3/4%. There is around $100 million outstanding on the $200 million loan. Existing lenders include J.P. Morgan, Citigroup, SunTrust Bank, The Bank of Nova Scotia, UBS, UFJ Bank, Royal Bank of Canada and Goldman Sachs. Lehman is the existing lead. "We've had a longstanding relationship with Lehman and they've done a number of both public and private financings for us," Chandler noted.