Plains All American Pipeline, L.P. (PAA) announced that it has inked a 364-day credit facility, worth $1 billion, in order to further strengthen its liquidity position. On a pro-forma basis, the partnership’s committed liquidity under the credit facility was $3.6 billion as of Dec 31, 2014, up from the previous limit of around $2.6 billion. The credit facility concluded on Jan 16, 2015.
Some of the world's leading financial institutions have played a significant role in this transaction.
Per the terms, Plains All American is allowed a maximum of 364 days to draw funds on the facility and repay it.
The latest credit facility will allow the partnership to meet its fund requirement for expanding its operations through a systematic capital spending program.
Plains All American frequently utilizes external sources – commercial paper program and issuance of senior notes – to finance its organic growth projects and strategic acquisitions.
The partnership is currently in the middle of several important ventures to strengthen its presence in various mineral-rich regions like the Eagle Ford Shale and the Permian Basin. The recent acquisition of a 50% interest in BridgeTex Pipeline Company from Occidental Petroleum Corporation (OXY) will allow Plains All American to expand its operations in the Permian Basin.
In addition, the step to increase the takeaway capacity of the Cactus Pipeline along with the Cushing Terminal Projects and the Gulf Coast Pipeline will boost the partnership’s service capability considerably. These projects will enable the partnership to meet increasing midstream service demand.
Plains All American invested $1.71 billion during the first nine months of 2014 and projects capital expenditure in the range of $1.5 billion to $2 billion in 2015.
Plains All American currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the sector include Spectra Energy Partners, LP (SEP) and Delek Logistics Partners, LP (DKL). Spectra Energy carries a Zacks Rank #1 (Strong Buy), while Delek Logistics holds a Zacks Rank #2 (Buy).
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