Enbridge Energy Partners, L.P., a master limited partnership (MLP), has obtained an increased $600 million, three-year revolver that offers both the MLP and its crude oil pipeline entity, Enbridge Energy, L.P., access to the funds. Under the structure of the company's old $350 million, five-year revolver, assets of the oil pipeline entity, an operating limited partnership (OLP), secured the deal and usage was restricted to the OLP itself. In comparison, the $600 million revolver is unsecured and can be tapped by both the MLP and the OLP for growth and working capital needs. For this reason the company found it advantageous to consolidate its financing at the MLP level, said Scott Wilson, v.p. of finance for Enbridge, Inc., parent company of the MLP.
The new credit comprises a $300 million, three-year revolver and a $300 million, 364-day revolver with term-out option. The deal is structured with different terms to provide adequate working capital for the company, said Wilson. "It also was designed to meet the term appetite of the lenders," he said, noting that the 364-day facility requires less of a capital commitment on banks' balance sheets. Wilson could not disclose the pricing on the deal, although he did state that the credit is more attractive at the MLP level because it is backed by a more diversified group of assets in comparison to the old revolver.
Bank of America and Bank of Montreal lead the new credit. Wachovia Bank and SunTrust joined on as new banks in Enbridge, Inc's, relationship banking group. The two banks were former lenders to Midcoast Energy Resources, which Enbridge Inc. purchased last year.