Narrative
Full Description
Project narrative
On September 18, 2019, a syndicate of ten lenders — including the Industrial and Commercial Bank of China (ICBC) and Bank of China (BOC) — entered into $1.28 billion USD syndicated loan agreement with Meade Pipeline Investment, LLC — a Delaware-incorporated joint venture and special purpose vehicle (JV/SPV) of Delaware-incorporated NextEra Energy Partners Pipelines, LLC, a wholly-owned subsidiary of Florida-based renewable energy company NextEra Energy, Inc. (66% equity stake) and GEPIF III Meade Investco, L.P., a wholly-owned subsidiary of Cayman Islands-incorporated Global Energy & Power Infrastructure Fund III, L.P., a fund managed by BlackRock, Inc. (34% equity stake) — for its acquisition of a 39.2% stake in the Central Penn Gas Pipeline. The financing package included a $757 million term loan tranche for the acquisition of the operating pipeline as well as a $158 million delayed draw construction package for a proposed expansion project, broken down into a $93 million USD term loan tranche a $65 million USD term loan tranche. The $757 million USD term loan carried a maturity period of seven years, a final maturity date of November 16, 2026, and an interest rate of LIBOR plus a margin of 162.5 basis points (bps). The two expansion project facilities — the $93 million USD term loan tranche and a $65 million USD term loan tranche — each carried a maturity period of seven years, a final maturity date of November 16, 2026, and an interest rate priced at LIBOR plus a margin of 200 bps, that would step to a margin of 162.5 bps in the pipeline's operational phase. Meade Pipeline Investment Holdings, LLC served as guarantor. This loan was secured (collateralized); MUFG Union Bank, N.A. served as collateral agent. The acquisition reached financial close on November 16, 2019. Record ID#105320 and ID#105329 capture ICBC's and BOC's respective contributions to the $757 million USD term loan tranche. The following lenders contributed the following amounts to this tranche: BOC ($75 million USD), ICBC ($112 million USD), Citibank ($75 million USD), CoBank ($105 million USD), Landesbank Hessen-Thüringen (Helaba) ($75 million USD), Kookmin Bank ($75 million), MetLife ($75 million USD), Mizuho Financial Group ($75 million USD), MUFG Bank ($117 million USD), and Société Générale (SocGen) ($75 million USD). Record ID#105319 captures ICBC's contribution to the $93 million USD term loan tranche of the delayed construction loan segment of the facility. Each of the following lenders contributed $13.29 million USD to this tranche: ICBC, Citibank, CoBank, Helaba, Mizuho Financial Group, MUFG Bank, and SocGen. Neither BOC nor ICBC contributed to the $65 million USD term loan tranche, which was a part of the delayed draw construction loan. Citibank and MUFG Bank served as joint bookrunners and lead arrangers on the facility. The proceeds of the loan were used by NextEra Energy Partners Pipelines and BlackRock-managed GEPIF III Meade Investco fund to jointly acquire Meade Pipeline Co.. Meade Pipeline Co. owns a 39.2% equity stake in the Central Penn Line. The Central Penn Line is an FERC-regulated, 185-mile natural gas pipeline in Pennsylvania, running from the Marcellus Shale in Susquehanna County, Pennsylvania, to Lancaster County. It can deliver approximately 1.7 billion cubic feet per day (Bcf/d).
Staff comments
1. The following organizations played the following roles in the acquisition: Squire Patton Boggs acted as NextEra’s legal advisor; Latham & Watkins provided legal counsel to lender(s) counsel; and Skadden, led by Allison Land, advised NextEra Energy on convertible equity. 2. A 6-month LIBOR rate was assumed. The average 6-month LIBOR rate for September 2019 was 2.04929%. Therefore, the interest rate has been coded as 2.04929% + 1.625% (162.5 bps) = 3.67429%.