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El Paso Gets Extension for $3B Debt Payment
El Paso Corp. said Wednesday a consortium of 50-plus bankers agreed to a one-year extension of the company’s $3 billion revolving credit facility that was due to expire in May 2004.
The new credit facility, which will now mature in June 2005, was secured by the Houston-based energy company’s interests in four interstate natural gas pipelines — El Paso Natural Gas, Tennessee Pipeline, ANR Pipeline and Colorado Interstate Gas (CIG) — as well as other assets, an El Paso spokeswoman said.
El Paso’s existing $1 billion revolving facility, which expires in August of this year, and an estimated $1 billion of other bank facilities (leases and letters of credit) will remain in place with no change in maturity, the company said. The key financial agreements associated with these facilities will be the same as those for the $3 billion facility, it noted.
Under the extension, El Paso is required to maintain debt-to-total capitalization not to exceed 75%, according to El Paso.
In addition, El Paso said it restructured approximately $750 million remaining outstanding Clydesdale preferred interests as a term loan that will amortize in equal quarterly amounts over the next two years. The term loan was secured by assets currently supporting the Clydesdale transaction, including various gas and oil properties and the company’s interest in CIG.
The transactions offer “significant value to all of our shareholders as they further improve the company’s liquidity position while simplifying and strengthening our balance sheet,” said El Paso Chairman Ronald L. Kuehn Jr.
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