Alliance Pipeline has completed a pair of credits--a $125 million U.S. credit and a C$490 million facility--with different lead arrangers heading up each facility, said Paul Belliveau, v.p. of finance and cfo. "We wanted to negotiate on both sides of the border simultaneously," he explained.
J.P. Morgan and Deutsche Bank lead the three-year, $125 million revolver, Belliveau said, noting that these leads also headed up Alliance's $300 million senior notes deal issued last month. The banks were selected according to their success at completing both transactions, he added. "[Alliance] looked at the total package," he said. "J.P. Morgan has been actively involved with Alliance since inception [in December 2000]," he said, adding that Deutsche Bank has also been involved in Alliance's previous financings, but earned the lead mainly because it has been a stable supplier of funding and has demonstrated credibility.
Alliance Canada--which includes the Canadian portion of the pipeline--had Scotia Capital and National Bank of Canada lead the Canadian credit, which includes a C$375 million extendable revolver and a C$115 million, 364-day term loan. Belliveau said the term loan would be taken out by a bond deal in the future. Both Scotia and National Bank have been involved with other transactions for Alliance, developing a comfortable relationship with the lenders, he stated. Both the U.S. and Canadian facilities refinance Alliance's existing debt, with some capacity left for future capital expenditures.
Belliveau would not divulge pricing details for the credits, but he said it was based on a grid tied to ratings. Alliance is rated BBB+/A3. He noted that Alliance's lending syndicate was pared down from about 46 banks to 11 for the U.S. deal. The Canadian deal also had 11 lenders, with Royal Bank of Canada declining to join the U.S. deal. The Royal Bank of Scotland only joined the U.S. deal because it does not do business in Canada, Belliveau explained. About 90% of both credits were drawn at closing.