Citigroup Maintains BPL Rating, Target Following BORCO Acquisition

Buckeye Partners LP

announced plans to acquire an 80% interest in the BORCO marine storage facility in Freeport, Bahamas from First Reserve for $1.36 billion. “BPL is financing the transaction with $825 million of equity with the balance to be funded through a bridge loan,” Citigroup writes. “First Reserve has agreed to take back $400 million of the equity that BPL plans to issue with the balance being issued to institutional investors.” Citigroup said that it maintains its Hold/High Risk (2H) rating and the target price of $65.50 as near-term accretion is relatively benign and long-term accretion is subject to execution risk and based on expansion margins that appear above current market. Buckeye Partners closed Tuesday at $66.19.