SOURCE: WestLB AG

December 19, 2007 17:16 ET

WestLB Closes USD 113 Million Senior Debt Facility for Arkalon Ethanol

Construction Over 90 Percent Complete

NEW YORK, NY--(Marketwire - December 19, 2007) - WestLB announced today that it closed a USD 113 million senior debt facility for Arkalon Ethanol, LLC (Arkalon). The facility includes a USD 97 million term loan for the construction of the plant as well as a USD 16 million working capital facility for operations. The non-recourse financing will be used for the construction of a 110 million gallon per year (MGPY) state-of-the-art corn/milo-based dry mill ethanol plant located in Liberal, Kansas. WestLB acted as Sole Bookrunner and Administrative Agent on this financing. WestLB was also a Joint Lead Arranger together with Merrill Lynch.

The plant, which is over 90 percent complete, has its first grind scheduled for this week with commercial operation expected in February 2008. The plant, strategically located near the Union Pacific railroad, has direct access to the premium Texas and California ethanol markets, significant grain feedstock and a large distiller's grain market, making this project very attractive to investors.

Arkalon is being equipped with rail loops providing unit train and 24 hour loading and unloading capabilities. Kansas is the ninth largest corn producing state and the largest milo producing state. Over 139 million bushels of corn and 31 million bushels of milo are grown within a 75 mile radius of Liberal.

"This transaction demonstrates that WestLB is able to structure financings that appeal to investors even in volatile markets," said Manish Taneja, Global Head of Loan Syndications. "We are very pleased with the success of this transaction."

The plant's attractive location includes its proximity to large feedlots, providing a strong local distiller's grains market from approximately 1.8 million head of cattle in a 100 mile radius of Liberal. Arkalon expects to sell 90 percent of its distiller's grains in wet form to local markets via truck, and approximately 70 percent of annual feedstock is expected to be supplied locally.

"The success of this deal was driven by the strength of the project and the persistence of the team in driving it to closure," says Carter Cheek, a partner at Silveron Capital Partners, which advised Arkalon Energy on the debt placement.

About Merrill Lynch

Merrill Lynch is one of the world's leading wealth management, capital markets and advisory companies, with offices in 38 countries and territories, and total client assets of almost USD 2 trillion. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world's largest publicly traded investment management companies, with more than USD 1 trillion in assets under management. For more information on Merrill Lynch, please visit http://www.ml.com/.

About WestLB Capital Markets

WestLB develops sophisticated structured solutions through a team of highly experienced investment banking and capital markets professionals. WestLB has a long-standing presence in the corporate, structured and asset-backed financing sectors supporting clients' needs with capital commitments, advisory services and innovative financing solutions. The bank's global relationships, coupled with its unique understanding of local economies, industries and cultures, help WestLB bankers consistently deliver high quality advice and service.

About WestLB

WestLB AG is one of Germany's leading financial services providers and offers the full range of products and services of a universal bank, focusing on lending, structured finance, capital market and private equity products, private banking, asset management, transaction services and real estate finance. WestLB has total assets of EUR 280 billion, as of September 30, 2007. For more information, please visit www.westlb.com.

In the United States, certain securities, trading, brokerage and advisory services are provided by WestLB's wholly owned subsidiary WestLB Securities Inc., a registered broker-dealer and member of the NASD and SIPC.

(NOTE: 3rd Quarter Earnings Release as of September 30, 2007, distributed to public on December 6, 2007)

Contact Information

  • Contact:
    WestLB AG - Group Communications - Americas

    Ashweeta Durani
    Ph: 212-852-6310
    Email Contact

    Connie J. Kain
    Ph: 212-597-1439
    Email Contact