Enviva Partners, LP (NYSE:EVA) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
On October18, 2018, Enviva Partners, LP(NYSE:EVA) (“Enviva” or the “Partnership”) entered into a Fourth Amendment to Credit Agreement and Second Amendment to Guarantee and Collateral Agent dated as of October18, 2018 (the “Fourth Amendment”) by and among the Partnership, as borrower, certain subsidiaries of the Partnership, and Barclays Bank PLC as administrative agent and collateral agent. The Fourth Amendment, among other things, amends and restates, in its entirety, the Credit Agreement entered into as of April9, 2015 (as previously amended, the “Existing Credit Agreement”) among the Partnership, the lenders identified therein, and Barclays Bank PLC, as administrative agent and collateral agent. The Existing Credit Agreement, which was scheduled to mature on April9, 2020, consisted of a $100 million revolving credit and a term loan facility with $41.2 million outstanding as of the date of the Fourth Amendment (the Existing Credit Agreement, as amended by the Fourth Amendment, the “Amended Credit Agreement”).
The Amended Credit Agreement provides for a $350 million senior secured revolving credit facility. The Partnership is also able to request loans under incremental facilities under the Amended Credit Agreement on the terms and conditions and in the maximum aggregate principal amounts set forth therein. The Amended Credit Agreement matures on the earlier to occur of (i)October18, 2023 or (ii)if the sum of the Partnership’s cash and cash equivalents and borrowing capacity under the revolving credit facility is less than the sum of the amount of the Partnership’s 8.5% senior unsecured notes (“Senior Notes”) then outstanding and $50.0 million during the 91-day period prior to and including November1, 2021 (the maturity date of the Senior Notes), the first day of that period on which such liquidity deficiency occurs.
A portion of the initial borrowings under the Amended Credit Agreement were used to repay the $41.2 million of outstanding term loans under the Existing Credit Agreement, and future borrowings under the Amended Credit Agreement may be used to support the Partnership’s strategic growth initiatives, drop-down acquisitions and for general partnership purposes.
Borrowings under the Amended Credit Agreement bear interest, at the Partnership’s option, at either a Eurodollar rate or at a base rate, in each case, plus an applicable margin. The applicable margin will fluctuate between 1.75%per annum and 3.00%per annum, in the case of Eurodollar rate borrowings, or between 0.75%per annum and 2.00%per annum, in the case of base rate loans, in each case, based upon the Partnership’s Total Leverage Ratio (as defined in the Amended Credit Agreement) at such time, with 25 basis point increases or decreases for each 0.50 increase or decrease in the Total Leverage Ratio from 2.75:1:00 to 4.75:1:00.
The Partnership will be required to pay a commitment fee on the daily unused amount under the revolving credit facility at a rate between 0.25% and 0.50%per annum.
Amounts borrowed under the revolving credit facility may be prepaid at any time without premium or penalty. Enviva is required to prepay revolving credit facility borrowings in certain circumstances. In addition, Enviva has the right to permanently reduce or terminate the unused portion of the commitments provided under the Amended Credit Agreement at any time.
The Amended Credit Agreement contains certain covenants, restrictions and events of default including, but not limited to, a change of control restriction and limitations on the Partnership’s ability to (i)incur indebtedness, (ii)pay dividends or make other distributions, (iii)prepay, redeem or repurchase certain debt, (iv)make loans and investments, (v)sell assets, (vi)incur liens, (vii)enter into transactions with affiliates, (viii)consolidate or merge, and (ix)assign certain material contracts to third parties or unrestricted subsidiaries. The Amended Credit Agreement also requires the Partnership to maintain(i)a maximum Total Leverage Ratio at or below 4.75 to 1.00 (or 5.00 to 1.00 during a Material Transaction Period, as defined in the Amended Credit Agreement) and (ii)a minimum Interest Coverage Ratio, (as defined in the Amended Credit Agreement), of not less than 2.25 to 1.00.
The foregoing description of the Amended Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Amended Credit Agreement, a copy of which is attached hereto as Exhibit10.1 and is incorporated herein by reference.
