Tesoro Petroleum Corp.'s $150 million "B" loan was two times oversubscribed late last week after the $650 million asset-based credit was pitched to investors last Wednesday. The institutional piece is priced at LIBOR plus 31/2% and the $500 million revolver has a spread of 31/4% over LIBOR, according to a trader familiar with the deal. He noted that $300 million of the revolver is expected to be drawn at closing. There is an up-front fee of 25 basis points on the "B" loan and a 100 basis points up-front fee for $35 million commitments to the pro rata. Pro rata tickets for $25 million also receive 75 basis points up-front and $15 million pro rata ticket holders get 50 basis points. The deal also includes a letter of credit sub-limit of $400 million. Bank One and Goldman Sachs are shopping the underwritten deal with FleetBoston Financial and Bank of America also involved, a banker said.
The trader noted that since another $200 million Tesoro term loan completed last month initially traded well--in the 1003/8 to 101 context--it is not a surprise that this deal is receiving such a positive response (LMW, 4/14). He said the new credit's asset-based structure is also a plus. Goldman is the sole lead for the $200 million loan, which priced at LIBOR plus 51/2%. The $650 million facility, along with the other term loan, partially refinanced Tesoro's previous $1.275 billion facility. The San Antonio, Texas-based oil refiner also issued $375 million in 8% senior secured notes to refinance its debt. Sharon Layman, Tesoro's v.p. and treasurer, did not return calls. Goldman and B of A officials declined to comment, while Bank One and Fleet bankers did not return calls.