Phillips 66's master limited partnership subsidiary, Phillips 66 Partners LP, announced March 22 that it borrowed $250 million under a new $400 million senior unsecured term loan credit facility that matures March 20, 2020.
The partnership said it would use the proceeds for "general partnership purposes, including repayment of amounts borrowed under the partnership's $750 million senior unsecured revolving credit facility."
The agreement stipulates that its loans may comprise any combination of eurodollar loans or reference rate loans.
Under the agreement, the annual interest rate for eurodollar loans is equal to the London Interbank Offered Rate plus an applicable margin while that of reference rate loans is equal to the greater of the prime rate or the Federal Funds Rate plus 0.5% plus an applicable margin.
The applicable margin depends on the partnership's credit rating and is between 0.625% and 1.0% for eurodollar loans and is 0% for reference rate loans.
Under the agreement, Phillips 66 Partners must pay the banks a commitment fee of between 0.05% and 0.1% on the average daily amount of the loan's undrawn commitment.
BMO Harris Bank NA committed $200 million under the credit agreement. Wells Fargo Bank and Commerzbank AG's New York Branch committed $150 million and $50 million, respectively. Bank of Montreal is acting as administrative agent. BMO Capital Markets and Wells Fargo acted as joint lead arrangers and joint bookrunners.