NGL Energy Partners refinances $250 million loan


Tulsa-based NGL Energy Partners LP  announced that it has entered into a new $250 million term loan facility with certain funds and accounts  managed by affiliates of Apollo Global Management, Inc. It is essentially a refinancing of a loan NGL used as part of its 2019 $892.5 million cash-free and debt-free acquisition of Mesquite Disposals Unlimited in the Permian Basin.

The move will allow NGL to refinance its existing $250 million bridge term loan facility that was established in July 2019 with TD Securities LLC as lead arranger and bookrunner and The Toronto-Dominion Bank, New York Branch as initial lender to finance a portion of the acquisition of Mesquite Disposals Unlimited LLC .

“We are pleased to work with Apollo, a leading investment management firm, and their well-respected team, on this transaction to term out the bridge facility we utilized last summer to fund the Mesquite transaction,” stated Mike Krimbill , NGL’s CEO. “The Apollo team has worked closely with our management team over the past several weeks conducting due diligence and preparing documentation to complete this financing. We believe an investment by Apollo of this magnitude is a strong endorsement of our business model, strategy and future growth opportunities, particularly in our Water Solutions business. We also appreciate the support of TD in providing the initial facility and for being an important relationship bank in our revolving credit facility.”

“We are pleased to provide this new facility to NGL, which has built a diversified midstream company with a premier U.S. water infrastructure franchise,” said Wilson Handler and Andy Safran , of Apollo’s Natural Resources Private Equity business. “With its high-quality assets, customer base and management team led by CEO Mike Krimbill , we believe NGL is well positioned for future success.”

Apollo Credit Managing Director Dan Vogel added, “This financing solution reflects our expanding large-scale direct lending capabilities and completing it in partnership with our Natural Resources Private Equity team underscores the benefits of Apollo’s integrated platform.”

The new term loan has a three-year maturity and is callable after two years at par. It bears interest at LIBOR plus 8.00%, subject to a 1.50% LIBOR floor and includes similar financial covenants as the Partnership’s existing revolving credit facility, among other terms. The loan is secured by a first lien interest in the Partnership’s assets.

TD Securities (USA) LLC acted as debt advisor to NGL. Paul Hastings LLP acted as legal counsel to NGL and Vinson & Elkins LLP acted as legal counsel to Apollo Funds.

The acquisition of Mesquite Disposals resulted in the largest water disposal system in the Delaware Basin with permitted capacity of more than two million barrels a day.

Source: Business Wire