EPIC Y-Grade Completes Issuance of New $1,075 Million Senior Secured Term Loan B

Rhea-AI Summary

EPIC Y-Grade, LP successfully completes a $1,075 million senior secured Term Loan B issuance, using the proceeds to repay existing loans and expand credit facility. Moody's and S&P reaffirm ratings, acknowledging positive impact of refinancing.

Insights

Financial Analyst

The refinancing maneuver by EPIC Y-Grade, LP is a strategic financial move that optimizes the company's debt profile. By securing a new Term Loan B, the company effectively lowers its interest obligations due to the extended maturity, which will likely result in improved cash flow management. The increased revolving credit facility provides additional liquidity, thus enhancing the company's financial flexibility.

From an investor standpoint, the credit rating affirmation by Moody's and S&P is a positive indicator. It suggests that the refinancing does not alter the company's risk profile significantly. However, investors should monitor the company's leverage ratios and interest coverage to assess the sustainability of its capital structure in the long run.

Energy Market Analyst

EPIC's focus on the strategic natural gas liquids (NGL) position in key Texas markets highlights the importance of location in the energy sector. Corpus Christi and Sweeny are becoming increasingly significant hubs for energy trade, especially for export markets. The downstream interconnectivity mentioned reflects an integrated infrastructure that can provide a competitive advantage in terms of logistics and cost efficiency.

For stakeholders, the expansion of y-grade positions by companies in Corpus Christi alongside EPIC Midstream signals a robust demand in the NGL market. This could translate into stable revenue streams for EPIC, contingent on market prices and the regulatory environment. Stakeholders should also consider the potential volatility in energy commodity markets and its impact on EPIC's financial performance.

HOUSTON--(BUSINESS WIRE)-- EPIC Y-Grade, LP (“EPIC” or “the Company”) today announced that it has completed the issuance of a new $1,075 million senior secured Term Loan B due 2029. The Company used the net proceeds from the Term Loan to repay its existing $989 million Term Loan B due 2027 and repay its existing $77 million facility on a standalone propane line. As part of the transaction, the Company also increased its current super-priority revolving credit facility to $70 million from $40 million and extended the facility’s maturity date to 2029. With the transaction, both Moody’s and S&P reaffirmed their ratings at B3 and B-, respectively, while also noting the positive impact of the refinancing.

“EPIC has continued to transform the business and this transaction affirms the market support for our team, our strategy, and our execution,” said Brian Freed, Chief Executive Officer of EPIC. “We have created a strategic natural gas liquids position in the Corpus Christi and Sweeny markets with extensive downstream interconnectivity. We’re pleased that companies are continuing to expand their y-grade positions in Corpus Christi with EPIC Midstream.”

About EPIC Y-Grade Holdings, LP

EPIC Y-Grade, LP (“EPIC Y-Grade”) was formed in 2017 to build and operate a 700-mile, 24” natural gas liquids pipeline and associated fractionation complex linking NGL reserves in the Permian and Eagle Ford to Gulf Coast refiners, petrochemical companies and export markets. EPIC Y-Grade’s operated fractionation complex is located at the terminus of the 24” pipeline in Robstown, Texas. EPIC Y-Grade has fractionation capacity totaling 240,000 barrels per day in Robstown and Sweeny, Texas. EPIC Y-Grade is backed by capital commitments from funds managed by the Private Equity Group of Ares Management Corporation (NYSE: ARES) as well as additional equity ownership by Chevron Corporation and FS Investments. For more information, visit www.epicmid.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240408270190/en/

EPIC Midstream Holdings, LP

Mike Garberding

Chief Financial Officer

(346) 231-1776

Mike.garberding@epicmid.com

Source: EPIC Midstream Holdings, LP

FAQ

What is the amount of the new senior secured Term Loan B issued by EPIC Y-Grade, LP?

EPIC Y-Grade, LP completed the issuance of a $1,075 million senior secured Term Loan B.

How did EPIC Y-Grade, LP utilize the net proceeds from the Term Loan?

The Company used the net proceeds to repay its existing $989 million Term Loan B due 2027 and repay its existing $77 million facility on a standalone propane line.

What was the change in EPIC Y-Grade, LP's super-priority revolving credit facility?

The Company increased its current super-priority revolving credit facility to $70 million from $40 million and extended the facility’s maturity date to 2029.

What were the ratings reaffirmed by Moody's and S&P after the transaction?

Moody's reaffirmed the rating at B3 and S&P at B-, acknowledging the positive impact of the refinancing.

Who is the Chief Executive Officer of EPIC Y-Grade, LP?

Brian Freed is the Chief Executive Officer of EPIC Y-Grade, LP.