ALLIANCE HOLDINGS GP, L.P. (NASDAQ:AHGP) Files An 8-K Entry into a Material Definitive Agreement
ITEM 1.01Entry into a Material Definitive Agreement
On January 27, 2017, Alliance Resource Partners, L.P.s (the
Partnership) wholly-owned subsidiary Alliance Resource Operating
Partners, L.P. (the Intermediate Partnership) entered into a
Fourth Amended and Restated Credit Agreement (the Credit
Agreement) with certain banks and other lenders, including
JPMorgan Chase Bank, N.A. as administrative agent (the
“Administrative Agent”), for a revolving credit facility and
term loan (the “Credit Facility”).The Credit Facility replaces
the $700 million revolving credit facility extended to the
Intermediate Partnership under its Third Amended and Restated
Credit Agreement, dated as of May 23, 2012 (the “Replaced Credit
Agreement”), by various banks and other lenders, including
JPMorgan Chase Bank, N.A. as paying agent, that would have
expired on May 23, 2017.The term loan under the Replaced Credit
Agreement remains in place under the Credit Agreement, and will
terminate on May 23, 2017 at which time the aggregate remaining
outstanding principle balance of $50.0 million will be paid in
full.
The lenders under the Replaced Credit Agreement that participate
in the amended terms of the Credit Facility only through May 23,
2017 are referred to as the Non-Extending Lenders while the
Lenders that continue to participate in the amended terms of the
Credit Facility beyond May 23, 2017 are referred to as the
Extending Lenders.
The Credit Agreement provides for a $479.75 million revolving
credit facility, including a sublimit of $125.0 million for the
issuance of letters of credit and a sublimit of $15.0 million for
swingline borrowings (the Revolving Credit Facility), and a term
loan in an aggregate principal of $50.0 million (the Term
Loan).The Revolving Credit Facility terminates on May 23, 2019,
at which time the aggregate outstanding principal amount of all
Revolving Credit Facility advances are required to be repaid in
full.The Revolving Credit Facility termination date will
accelerate (a) to May 23, 2017 if, on or before May 13, 2017, the
Intermediate Partnership has not satisfied the Cavalier Condition
(as defined in the Credit Agreement) or (b) to March 27, 2018 if,
on or before March 27, 2018, the Partnership has not satisfied
the Senior Notes Condition (as defined in the Credit Agreement).
Borrowings under the Credit Agreement bear interest, at the
option of the Intermediate Partnership, at either (i) the base
rate, which rate is equal to the greater of (A) the
Administrative Agent’s prime rate, (B) the federal funds rate
plus one-half of one percent and (C) a rate based on the London
Interbank Offered Rate (for U.S. dollar deposits) for a one-month
period (as adjusted for certain statutory reserve requirements
for “eurocurrency liabilities”) plus one percent, in each case
plus an applicable margin, or (ii) a rate based on the London
Interbank Offered Rate (for U.S. dollar deposits) for the
interest period selected by the Intermediate Partnership (as
adjusted for certain statutory reserve requirements for
“eurocurrency liabilities”) plus an applicable margin, and
interest accrued on the advances is, in general, payable
quarterly in arrears or, in the case of Eurodollar Rate Advances,
on the last day of the applicable “LIBOR” interest period.
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The applicable margin for Term Loan Advances of Non-Extending
Lenders and Extending Lenders and Revolving Credit Facility
Advances for Non-Extending Lenders is determined by reference
to the Consolidated Debt to Consolidated Cash Flow Ratio (as
such term is defined in the Credit Agreement) of the
Intermediate Partnership as set forth below:
|
Consolidated Debt to Consolidated Cash Flow Ratio |
Base Rate Advances |
Eurodollar Rate Advances |
|
Level I 1.50:1.0 or greater |
0.900% |
1.900% |
|
Level II 1.00:1.0 or greater, but less than 1.50:1.0 |
0.650% |
1.650% |
|
Level III 0.50:1.0 or greater, but less than 1.00:1.0 |
0.400% |
1.400% |
|
Level IV less than 0.50:1.0 |
0.150% |
1.150% |
The applicable margin for the Revolving Credit Facility
Advances of Extending Lenders is determined by reference to the
Consolidated Debt to Consolidated Cash Flow Ratio (as such term
is defined in the Credit Agreement) of the Intermediate
Partnership as set forth below:
|
Consolidated Debt to Consolidated Cash Flow Ratio |
Base Rate Advances |
Eurodollar Rate Advances |
|
Level I 1.50:1.0 or greater |
1.850% |
2.850% |
|
Level II 1.00:1.0 or greater, but less than 1.50:1.0 |
1.600% |
2.600% |
|
Level III 0.50:1.0 or greater, but less than 1.00:1.0 |
1.350% |
2.350% |
|
Level IV less than 0.50:1.0 |
1.000% |
2.000% |
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The Credit Agreement also provides for the payment of certain
commitment fees with respect to the Lenders, a percentage per
annum as follows:
|
Consolidated Debt to Consolidated Cash Flow Ratio |
Non-Extending Lenders |
Extending Lenders |
|
Level I 1.50:1.0 or greater |
0.350% |
0.350% |
|
Level II 1.00:1.0 or greater, but less than 1.50:1.0 |
0.250% |
0.350% |
|
Level III 0.50:1.0 or greater, but less than 1.00:1.0 |
0.200% |
0.350% |
|
Level IV less than 0.50:1.0 |
0.175% |
0.350% |
The Credit Agreement also provides for other fees, including a
fee with respect to the available amount under outstanding
letters of credit.
The Credit Agreement requires the Intermediate Partnership and
its restricted subsidiaries to maintain various covenants
restricting, among other things, the amount of distributions by
the Intermediate Partnership, the incurrence of additional
indebtedness and liens, the sale of assets, the making of
investments, the entry into mergers and consolidations and the
entry into transactions with affiliates, in each case subject
to various exceptions.The Credit Agreement also requires the
Intermediate Partnership to remain in control of a certain
amount of mineable coal reserves relative to its annual
production.In addition, the Credit Agreement requires the
Intermediate Partnership to maintain (i) a minimum Consolidated
Debt to Consolidated Cash Flow Ratio of not more than 2.25 to
1.0 and (ii) a ratio of Consolidated Cash Flow to Consolidated
Interest Expense (as such terms are defined in the Credit
Agreement) of not less than 3.0 to 1.0, in each case during the
four most recently ended fiscal quarters.
The Credit Agreement is secured by substantially all of the
Partnerships assets and contains customary provisions regarding
events of default which, if not cured within applicable grace
periods, would permit the lenders to declare all outstanding
advances immediately due and payable, including but not limited
to failure to make timely payments of principal of or interest
on the outstanding advances, the failure to comply with
covenants or representations in the Credit Agreement,
cross-defaults with certain other indebtedness, upon a “Change
of Control” (as defined in the Credit Agreement), certain
bankruptcy and insolvency related events, certain monetary
judgment defaults, and certain claims arising under
environmental laws that if, adversely determined, would be
material.
Subject to certain exceptions, each of the domestic
subsidiaries of the Intermediate Partnership is a guarantor of
the obligations created under the Credit Agreement to a
Subsidiary Guaranty, dated as of January 27, 2017 (the
Subsidiary Guaranty).Under the Subsidiary Guaranty, each such
subsidiary a party thereto has unconditionally guaranteed
payments due under the Credit Agreement, including certain
other additional expenses that may be incurred.Subject to
certain exceptions, new domestic subsidiaries of the
Intermediate Partnership that are subsequently formed
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or acquired by the Intermediate Partnership are required to
become a party to the Subsidiary Guaranty within a certain
period of time.
The foregoing description of the Credit Agreement is a summary
only and is qualified in its entirety by reference to the
complete text of the Credit Agreement, a copy of which is
attached as Exhibit 10.1 to this Current Report on Form 8-K and
incorporated herein by reference.
Note Purchase Agreement
On January 27, 2017, the Intermediate Partnership entered into
the First Amendment (the Note Amendment) to the Note Purchase
Agreement dated June 26, 2008 (the Note Purchase Agreement).
The Note Amendment provides for certain modifications to the
terms and provisions of the Note Purchase Agreement, including
the granting of liens on substantially all of the assets of the
Intermediate Partnership to secure the obligations of the
Intermediate Partnership under the Note Purchase Agreement on a
pari passu basis with its obligations under the Credit
Agreement.The Note Amendment also modifies certain covenants to
align with the same covenants as provided for under the Credit
Agreement.
The foregoing description of the Note Purchase Agreement is a
summary only and is qualified in its entirety by reference to
the complete text of the Note Purchase Agreement, a copy of
which is attached as Exhibit 10.2 to this Current Report on
Form 8-K and incorporated herein by reference.
Item 2.03Creation of a Direct Financial Obligation
The information included in Item 1.01 of this Current Report on
Form 8-K is incorporated by reference into this Item 2.03 of
this Current Report on Form 8-K.
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ITEM 9.01FINANCIAL STATEMENTS AND EXHIBITS.
(d)Exhibits
10.1Fourth Amended and Restated Credit Agreement, dated as of
January, 27, 2017, by and among Alliance Resource Operating
Partners, L.P., as borrower, the initial lenders, initial
issuing banks and swingline bank named therein, JPMorgan Chase
Bank, N.A., as administrative agent, JPMorgan Chase Bank, N.A.,
Wells Fargo Securities, LLC and Citigroup Global Markets Inc.
as joint lead arrangers, JPMorgan Chase Bank, N.A., Wells Fargo
Securities, LLC, Citigroup Global Markets Inc., and BOKF, NA
DBA Bank of Oklahoma as joint bookrunners, Wells Fargo Bank,
National Association, Citibank, N.A., and BOKF, NA DBA Bank of
Oklahoma as syndication agents, and the other institutions
named therein as documentation agents.
10.2First Amendment to Note Purchase Agreement, dated as of
January 27, 2017, 6.28% Senior Notes Due June 26, 2015, and
6.72% Senior Notes due June 26, 2018, dated as of June 26,
2008, by and among Alliance Resource Operating Partners, L.P.
and various investors.
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About ALLIANCE HOLDINGS GP, L.P. (NASDAQ:AHGP)
Alliance Holdings GP, L.P. is a limited partnership company. The Company owns directly and indirectly 100% of the members’ interest in Alliance Resource Management GP, LLC (MGP), the managing general partner of Alliance Resource Partners, L.P. (ARLP). The Company’s segments include Illinois Basin, Appalachia, and Other and Corporate. The Illinois Basin segment consists of various operating segments, including Webster County Coal’s Dotiki mining complex, Gibson County Coal’s mining complex, Hopkins County Coal’s mining complex, White County Coal’s Pattiki mining complex, Warrior’s mining complex, Sebree Mining’s mining complex, River View’s mining complex and the Hamilton mining complex. The Appalachia segment consists of various operating segments, including the Mettiki mining complex, the Tunnel Ridge mining complex and the MC Mining mining complex. The Other and Corporate segment includes Alliance Service, Inc. (ASI) and its subsidiary, Matrix Design and its subsidiaries. ALLIANCE HOLDINGS GP, L.P. (NASDAQ:AHGP) Recent Trading Information
ALLIANCE HOLDINGS GP, L.P. (NASDAQ:AHGP) closed its last trading session up +0.51 at 29.79 with 57,449 shares trading hands.