Targa Resources structure, price talk emerge as $2.475 billion credit facility launches

By Sara Rosenberg

New York, July 19 - Targa Resources Inc. releases structural and price talk details on its proposed $2.475 billion senior secured credit facility as the deal was launched with a bank meeting on Thursday afternoon, according to a syndicate document.

Credit Suisse, Merrill Lynch, Lehman Brothers and Deutsche Bank are the lead banks on the deal.

The facility consists of a $300 million six-year revolver (B+) talked at Libor plus 225 basis points, a $300 million seven-year synthetic letter-of-credit facility (B+) talked at Libor plus 250 bps, a $1.525 billion seven-year first-lien term loan (B+) talked at Libor plus 250 bps and a $350 million 71/2-year second-lien term loan (CCC+) talked at Libor plus 575 bps, the document said.

The revolver has a 50 bps commitment fee.

The second-lien term loan carries call protection of 102 in year one and 101 in year two, the source added.

Proceeds will be used to refinance existing bank debt and fund a tender offer for the company's $250 million 8½% senior notes due 2013.

The tender offer is scheduled to expire on Aug. 15.

Targa is a Houston-based midstream energy company.

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