AL Gulf Coast Terminals, a majority owned portfolio company of energy investment company ArcLight Capital Partners, has closed a $305 million (236 million) financing supported by the ownership interests in its subsidiary, Houston Fuel Oil Terminal Company (HFOTCO).
HFOTCO, located on the Houston Ship Channel, is the largest provider of crude and residual fuel oil storage in the Gulf of Mexico with 13.3 million barrels of storage capacity.
ArcLight invested in HFOTCO in 2007 and increased its ownership to 100% in October 2009 by purchasing 50% of the business from Motiva Enterprises, a joint venture between Shell and Saudi Refining.
HFOTCO provides product storage, heating, blending, and transportation services for regional refineries, major integrated oil companies, and trading operations.
HFOTCO's size and strategic location allow it to provide unique blending and storage services, which are critical to many of its customers' businesses.
HFOTCO has begun construction on a fourth deep-water ship dock which will ensure HFOTCO's superior servicing levels to its existing customer base as well as allow the company to execute its plans for additional expansion to accommodate current customer demand.
ArcLight refinanced the existing holding company facility with a $305 million term Loan B facility rated BBB-/Ba2 by S&P and Moody's, respectively. Barclays Capital was the sole arranger for the financing. The proceeds from the financing were utilized to repay existing outstanding debt and provide a distribution to the sponsors.