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Valero Energy Partners to Acquire Corpus Christi Terminal

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Valero Energy Partners L.P.VLP announced that the board of directors of its general partner has approved its decision to purchase the Corpus Christi Terminal Services Business from a Valero Energy Corporation VLO subsidiary. The acquisition will cost the partnership $465 million and is anticipated to close on Oct 1, 2015.

The aforesaid business comprises two terminals that support the East and West refineries of Valero's Corpus Christi terminal. The assets include 134 tanks with a storage capacity of 10.1 million barrels for crude oil, intermediates and refined petroleum products.

The acquisition will likely be financed by the partnership with a borrowing of $395 million under a subordinated loan agreement with Valero along with the issuance of additional common units and general partner units to Valero subsidiaries of about $70 million. The newly issued units will be so allocated as to facilitate Valero in maintaining its 2% general partner interest.

Post transaction, the partnership intends to enter a 10-year terminaling agreement with an affiliate of Valero. The business to be purchased is estimated to contribute EBITDA of $50 million in its first full year of operation.

The terms of the transaction were approved by the general partner's board, upon fulfillment of certain definitive documentation, once it received a green signal from its conflicts committee.

Valero Energy Partners carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space are Alon USA Partners, LP ALDW and ReneSola Ltd SOL . Both these stocks sport a Zacks Rank #1 (Strong Buy).

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VALERO ENERGY (VLO): Free Stock Analysis Report

RENESOLA LT-ADR (SOL): Free Stock Analysis Report

ALON USA PTNRS (ALDW): Free Stock Analysis Report

VALERO EGY PTNR (VLP): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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