FleetBoston Financial is in the market with a $130 million add-on deal for Houston-based Plains Allamerica Pipeline LP's Canadian subsidiary Plains Marketing to fund the Canadian company's plans to finance the purchase of $160 million in assets of Canadian-based Murphy Oil Company. Al Swanson, treasurer, said the company attached the subsidiary's acquisition credit to the parent's outstanding $700 million credit in an effort to keep pricing lower and covenants more lenient. Swanson explained that with this structure all tangible hard assets under the combined entities will back the revolver.
Swanson said commitments have come in on the deal, but he declined to name banks. He expects existing lenders to come in on the revolver and new banks and institutions to participate on the term piece. The deal is expected to close in April as the company will need the funds for the acquisition.
Swanson said the company chose Fleet to lead the deal because of a previous relationship it had with the bank. "They led the original deal so it only makes sense for them to lead this one," he added. He said pricing is now set at LIBOR plus 23/4 % on the $30 million revolver and LIBOR plus 3% on the $100 million term "B."