Macquarie Infrastructure Company (NYSE: MIC) announced that it has successfully refinanced the debt of its Hawaii-based gas processing and distribution business. The Gas Company used the proceeds to refinance all of its debt and to put in place a facility that will fund future growth initiatives.
The Gas Company issued $100.0 million of 10-year, non-amortizing senior secured notes. The notes bear interest at a fixed rate of 4.22%.
The business also obtained an $80.0 million, 5-year, non-amortizing term loan. The interest rate floats at LIBOR + 225 basis points. The floating rate has been fixed for 4 years at an all-in rate of 2.89% using an interest rate hedge (swap).
The proceeds of the senior secured notes and the term loan were used to completely repay $180.0 million of debt comprising two existing 5-year term loans and a revolving credit facility. Those facilities would have matured in June of 2013.The weighted average cost of debt borne by The Gas Company has been reduced from 4.9% to 3.6%. The lower rates will reduce its cash interest expense by approximately $2.3 million per year or approximately $0.05 per share per year, pre-tax. “The terms of the new debt facilities and the fact that the offerings were over-subscribed reflect the strong financial performance of The Gas Company to date as well as its prospects,” said James Hooke, Chief Executive Officer of MIC. “The overall increase in the amount of credit available, when approved, is expected to facilitate the further growth of the business including the potential expansion into LNG distribution.” The Gas Company also obtained commitments to fund an additional $60.0 million in a 5-year revolving credit facility that is expected to be available to fund growth capital expenditures and general corporate needs. That facility is expected to become effective following approval by the Hawaii Public Utilities Commission. Once approved, drawings on the facility will bear interest at LIBOR + 150 basis points.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV