USA Compression Partners to sell $725 million eight-year notes, Friday pricing seen

By Paul Deckelman

New York, March 5 – USA Compression Partners, LP plans to sell $725 million of senior notes due 2026, high-yield syndicate sources said Monday.

They said that the Rule 144A/Regulation S transaction will be brought to market via J.P. Morgan Securities LLC and Barclays Capital Inc. and will likely price on Friday.

They said that initial whispers on the deal in the marketplace indicated a yield in the low 7% area.

The company – an Austin, Texas-based third-party provider of compression services to customers across the oil & gas industry, allowing the movement of natural gas and crude oil through the domestic pipeline system – plans to use the net proceeds of the offering, together with the net proceeds from a private placement of preferred units of the partnership and borrowings under its asset-based revolving credit facility to fund the cash purchase price of its previously announced acquisition of all of the issued and outstanding membership interests in CDM Resource Management LLC and CDM Environmental & Technical Services LLC from Energy Transfer Partners, LP for a total consideration of approximately $1.7 billion.

The financing for that acquisition will consist of units representing limited partner interests in USA Compression Partners and an amount in cash equal to $1.225 billion, subject to certain adjustments.

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