BLUEKNIGHT ENERGY PARTNERS, L.P. (NASDAQ:BKEP) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.
Entry into a Material Definitive Agreement.
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Partnership) entered into a Second Amended and Restated Credit
Agreement (the New Credit Agreement), with Wells Fargo Bank,
National Association, as Administrative Agent, and the several
lenders from time to time party thereto.
existing senior secured credit facility. The New Credit Agreement
permits the Partnership to borrow up to $450.0 million on a
revolving credit basis, and the maturity date of the New Credit
Agreement is May 11, 2022. Upon the closing of the New Credit
Agreement, the Partnership had approximately $307.6 million of
outstanding borrowings and $1.5 million of outstanding letters of
credit under the New Credit Agreement, leaving the Partnership
with approximately $140.9 million available commitments for
additional borrowings and letters of credit under the New Credit
Agreement, although the Partnerships ability to borrow such funds
may be limited by the financial covenants in the New Credit
Agreement. In connection with entering into the New Credit
Agreement, the Partnership paid certain upfront fees to the
lenders thereunder, and the Partnership paid certain arrangement
and other fees to the arrangers and agents of the New Credit
Agreement.
of the Partnerships existing subsidiaries. Obligations under the
New Credit Agreement are secured by first priority liens on
substantially all of the Partnerships assets and those of the
guarantors.
financial institutions to become lenders, or for any existing
lender to increase its revolving commitment thereunder, subject
to an aggregate maximum of $600.0 million for all loan
commitments under the New Credit Agreement.
Agreement at any time without premium or penalty (other than
customary LIBOR breakage costs), subject to certain notice
requirements. The New Credit Agreement requires mandatory
prepayments of amounts outstanding thereunder with the net
proceeds of certain asset sales, property or casualty insurance
claims, and condemnation proceedings, unless the Partnership
reinvests such proceeds in accordance with the New Credit
Agreement, but these mandatory prepayments will not require any
reduction of the lenders commitments under the New Credit
Agreement.
Partnerships option, at either the reserve-adjusted eurodollar
rate (as defined in the New Credit Agreement) plus an applicable
margin that ranges from 2.0% to 3.0% or the alternate base rate
(the highest of the agent banks prime rate, the federal funds
effective rate plus of 1%, and the 30-day eurodollar rate plus
1%) plus an applicable margin that ranges from 1.0% to 2.0%. The
Partnership pays a per annum fee on all letters of credit issued
under the New Credit Agreement, which fee equals the applicable
margin for loans accruing interest based on the eurodollar rate,
and the Partnership pays a commitment fee ranging from 0.375% to
0.5% on the unused commitments under the New Credit Agreement.
The applicable margins for the Partnerships interest rate, the
letter of credit fee and the commitment fee vary quarterly based
on the Partnerships consolidated total leverage ratio (as defined
in the New Credit Agreement, being generally computed as the
ratio of consolidated total debt to consolidated earnings before
interest, taxes, depreciation, amortization and certain other
non-cash charges).
tested on a quarterly basis, based on the rolling four-quarter
period that ends on the last day of each fiscal quarter.
senior notes in an aggregate principal amount (when combined with
all other qualified senior notes previously or concurrently
issued) that equals or exceeds $200.0 million, the maximum
permitted consolidated total leverage ratio is 4.75 to 1.00;
provided that the maximum permitted consolidated total leverage
ratio will be 5.25 to 1.00 for certain quarters based on the
occurrence of a specified acquisition (as defined in the New
Credit Agreement, but generally being an acquisition for which
the aggregate consideration is $15.0 million or more). The
acquisition of the nine asphalt terminals from Ergon in October
2016 qualified as a specific acquisition.
senior notes in an aggregate principal amount (when combined with
all other qualified senior notes previously or concurrently
issued) that equals or exceeds $200.0 million, the maximum
permitted consolidated total leverage ratio is 5.00 to 1.00;
provided, that, from and after the fiscal quarter ending
immediately preceding the fiscal quarter in which a specified
acquisition occurs to and including the last day of the second
full fiscal quarter following the fiscal quarter in which such
acquisition occurred, the maximum permitted consolidated total
leverage ratio is 5.50 to 1.00.
(as defined in the New Credit Agreement, but generally computed
as the ratio of consolidated total secured debt to consolidated
earnings before interest, taxes, depreciation, amortization and
certain other non-cash charges) is 3.50 to 1.00, but this
covenant is only tested from and after the date on which the
Partnership issues qualified senior notes in an aggregate
principal amount (when combined with all other qualified senior
previously or concurrently issued) that equals or exceeds $200.0
million.
defined in the New Credit Agreement, but generally computed as
the ratio of consolidated earnings before interest, taxes,
depreciation, amortization and certain other non-cash charges to
consolidated interest expense) is 2.50 to 1.00.
that, among other restrictions, limit the Partnerships ability
to:
create, issue, incur or assume indebtedness;
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create, incur or assume liens;
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consummate mergers or acquisitions;
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sell, transfer, assign or convey assets;
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repurchase the Partnerships equity, make distributions to
unitholders and make certain other restricted payments; |
make investments;
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modify the terms of certain indebtedness, or prepay certain
indebtedness; |
engage in transactions with affiliates;
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enter into certain hedging contracts;
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enter into certain burdensome agreements;
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change the nature of the Partnerships business; and
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make certain amendments to the Partnerships partnership
agreement. |
quarterly distributions of available cash (as defined in the
Partnerships partnership agreement) to unitholders so long as, on
a pro forma basis after giving effect to such distributions (i)
the Partnership is in compliance with its financial covenants
under the New Credit Agreement and (ii) no default exists under
the New Credit Agreement.
Agreement includes an event of default if (i) Blueknight General
Partners G.P., L.L.C. (the General Partner) ceases to own 50% of
the Partnerships general partner interest or ceases to control
the Partnership, or (ii) Ergon, Inc. ceases to own and control
50.0% or more of the membership interests of the General Partner.
events occurs with respect to the General Partner or the
Partnership, all indebtedness under the New Credit Agreement will
immediately become due and payable. If any other event of default
exists under the New Credit Agreement, the lenders may accelerate
the maturity of the obligations outstanding under the New Credit
Agreement and exercise other rights and remedies. In addition, if
any event of default exists under the New Credit Agreement, the
lenders may commence foreclosure or other actions against the
collateral.
Partnership is unable to make any of the representations and
warranties in the New Credit Agreement, the Partnership will be
unable to borrow funds or have letters of credit issued under the
New Credit Agreement.
reference to the New Credit Agreement, a copy of which is filed
as Exhibit 10.1 to this Current Report on Form 8-K (this Current
Report) and incorporated herein by reference.
Item 2.03.
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Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant |
incorporated herein by reference.
Item 9.01.
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Financial Statements and Exhibits.
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EXHIBIT NUMBER
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DESCRIPTION
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10.1
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Amended and Restated Credit Agreement, dated as of May
11, 2017, by and among the Partnership, Wells Fargo Bank, National Association, as Administrative Agent, and the several lenders from time to time party thereto. |
About BLUEKNIGHT ENERGY PARTNERS, L.P. (NASDAQ:BKEP)
Blueknight Energy Partners, L.P. is a master limited partnership company. The Company provides integrated terminalling, storage, gathering and transportation services for companies engaged in the production, distribution and marketing of crude oil and liquid asphalt cement. It operates in four segments: asphalt terminalling services, which provides asphalt product and residual fuel terminalling, storage and blending services at its terminalling and storage facilities; crude oil terminalling and storage services, which provides crude oil terminalling and storage services at its terminalling and storage facilities; crude oil pipeline services, which owns and operates pipeline systems, the Mid-Continent system, the East Texas system and Eagle North system, that gather crude oil purchased by its customers and transports it to refiners, and crude oil trucking and producer field services, which uses its owned and leased tanker trucks to gather crude oil for its customers.
BLUEKNIGHT ENERGY PARTNERS, L.P. (NASDAQ:BKEP) Recent Trading Information
BLUEKNIGHT ENERGY PARTNERS, L.P. (NASDAQ:BKEP) closed its last trading session up +0.05 at 7.05 with 46,406 shares trading hands.