Macquarie Infrastructure refinances Atlantic, IMTT debt facilities

By Wendy Van Sickle

Columbus, Ohio, Dec. 6 – Macquarie Infrastructure Corp. completed the refinancing of the primary debt facility of its Atlantic Aviation subsidiary on Wednesday and extended the maturity of two of three facilities supporting its International-Matex Tank Terminals subsidiary on Thursday.

Atlantic refinancing

The Atlantic refinancing consists of a $1,025,000,000 term loan maturing in December 2025 and a $350 million revolver – $35 million of which was drawn at closing – that matures in December 2023. The new Atlantic term loans and revolver replace an existing term loan that had an amortized principal balance of $375 million at closing and an undrawn $350 million revolver, both of which had October 2021 maturities.

The new term loan bears interest at Libor plus 375 basis points. The revolver is subject to a leverage-based pricing grid with initial interest of Libor plus 225 bps.

The all-in cost of the loan will be reduced to about 5.6% by a 1% Libor cap on a notional $400 million of Atlantic debt, according to a news release.

In addition to repayment of the existing term loan, $350 million of the new term loan proceeds are expected to be used to repay a like amount of holding company level convertible notes that mature in July of 2019.

At closing, stand-alone leverage at Atlantic was about 4x.

IMTT refinancing

The IMTT amendment resulted in an extension of the maturity date for each of the business’ $600 million revolving credit facility and $509 million of tax exempt debt by 3.5 years to December of 2023 and 2025, respectively.

At closing, stand-alone leverage at IMTT was about 3.6x.

Both of IMTT’s revolver and tax-exempt facilities are subject to either a ratings-based or leverage-based pricing grid. At closing, pricing on the revolver was Libor plus 150 bps, while pricing on the tax exempt debt was based on a formula of 80% times the sum of Libor plus 195 bps. The pricing of the tax-exempt debt is about 40 bps lower than the pricing prior to the refinancing.

“We are pleased with the support from existing and new lenders in the refinancing of our two largest businesses,” Christopher Frost, chief executive officer of Macquarie Infrastructure, said in the release.

“The successful refinancing and amendment of these debt facilities further de-risks [Macquarie Infrastructure] by extending maturity dates, diversifying funding sources and providing a permanent solution to the refunding of our holding company level convertible notes that mature in July 2019.

“Together with the sale of BEC and other, smaller, non-core businesses in 2018, we have made substantial progress relative to our strategic priority of increasing the company’s balance sheet strength and financial flexibility.”

Including the refinancing and amendment of the Atlantic and IMTT facilities, the weighted average maturity of all debt facilities across Macquarie Infrastructure has increased to 6.3 years from 5.1 years at Oct. 30.

Macquarie Infrastructure is a New York-based owner and operator of businesses providing basic services to customers in the United States, specifically a bulk liquid terminals business, International-Matex Tank Terminals; an airport services business, Atlantic Aviation; an energy services, production and distribution segment, MIC Hawaii; and a contracted power segment.

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