Midstream company Zenith Energy US Logistics Holdings has pulled a $450 million leveraged loan from syndication as investors were reluctant to jump into a credit exposed to unresolved contingencies from an arbitration case and an expiring contract that could adversely impact cash flow, according to three sources familiar with the matter.

Barclays, Credit Suisse and HSBC are providing committed financing for the deal, which marks the borrower’s debut in the leveraged loan market and includes a $410 million seven-year first-lien loan with a $40 million delayed-draw tranche, accompanied by a $50 million five-year revolving credit facility.

Commitments were sought on Dec. 15, after a Dec. 6 launch.

Proceeds, along with $364 million of equity from private equity owner Warburg Pincus, are earmarked to fund Zenith’s acquisition of publicly traded energy logistics assets operator Arc Logistics Partners LP (NYSE: ARCX) and refinance its debt. The funds are also slated to purchase minority interests in Gulf LNG Holdings Group LLC, a LNG regasification and storage terminal in Mississippi, and a crude-by-rail terminal and pipeline in Joliet, Ill., connected to ExxonMobil Corp.’s (NYSE: XOM) Joliet refinery, from Lightfoot Capital.

The delayed-draw loan will ultimately be used to buy out the lease on the company’s Portland crude oil terminal in 2018.

Zenith’s debt-to-EBITDA at closing will be 5.5 times, based on $410 million of funded debt and $74 million of pro forma estimated 2017, according to two additional sources familiar with the matter.

“The company has a lot of leverage and it’s a complex story with a lot of moving pieces, which makes it difficult to do due diligence,” an investor said.

The arrangers will be on the hook to fund the debt if it is not removed from their balance sheets by the time of the deal’s closing, which is expected by Dec. 21, according to an Oct. 30 Arc Logistics filing with the Securities and Exchange Commission. The merger was approved by Arc Logistics shareholders on Dec. 18, according to a company press release.

Barclays plans to relaunch the deal in the New Year, one of the sources said.

Barclays declined to comment. The company and Warburg Pincus did not respond to inquiries.

Gulf LNG is currently in arbitration with Italian oil and gas company Eni SpA’s (NYSE: E) U.S. subsidiary, Eni USA

Eni USA is seeking to unwind its contract with the facility, as it is currently idle given unattractive economics of importing LNG. While the arbitration hearing was held in January 2017, the ruling has been extended to the end of February 2018. Gulf LNG will represent roughly 25% of projected 2017 EBITDA, the two additional sources said.

Given the unpredictability of the arbitration, Warburg Pincus plans to inject up to $100 million of additional equity to limit an increase in leverage, and drop in cash flow, that could result from a negative ruling.

Zenith also faces the expiration of its Joliet contract with ExxonMobil in May 2018. While the company expects the contract to be renewed, any unfavorable revisions could present a burden since the majority of the terminal’s revenue comes from the contract and the terminal accounts for about 25% of Zenith's EBITDA, according to a Dec. 5 Standard & Poor’s report.

The term loan was guided in the 525 bp to 550 bp over Libor range, with a 25 bp stepdown upon successful completion of the Gulf LNG litigation, subject to a 1% floor. Investors were offered the loan at a 99 discount with six months of soft-call protection at 101.

Moody’s and Standard & Poor’s rate the company and the loan B2/B+.