Ferrellgas Partners, L.P. (NYSE:FGP) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.
On April 16, 2020, Ferrellgas, L.P. (the “Operating Partnership”) and Ferrellgas Finance Corp. (together with the Operating Partnership, the “Issuers”), as co-issuers, issued $700 million aggregate principal amount of their 10.000% Senior Secured First Lien Notes due 2025 (the “Notes”) to an Indenture, dated as of April 16, 2020 (the “Indenture”), among the Issuers, the Guarantors (as defined below) and Delaware Trust Company, as trustee (in such capacity, the “Trustee”) and as collateral agent (in such capacity, the “Collateral Agent”). The Notes consist of $575 million aggregate principal amount of 10.000% Senior Secured First Lien Notes due 2025 priced on April 8, 2020 (the “Initial Notes”) and $125 million aggregate principal amount of 10.000% Senior Secured First Lien Notes due 2025 priced on April 13, 2020 in an add-on offering (the “Additional Notes”), in each case, issued in an offering exempt from registration under the Securities Act of 1933, as amended, in reliance on Rule 144A and Regulation S thereunder. The Initial Notes and the Additional Notes have the same terms, except for the initial issue price, and were issued as a single class of debt securities under the Indenture and with the same CUSIP numbers. The Initial Notes and Additional Notes were issued at prices of 100.000% and 103.000% of par, respectively.
The Issuers received net proceeds from the offerings of the Notes of approximately $684.7 million, after deducting the initial purchaser’s discount and estimated offering expenses. Contemporaneously with the closing of the issuance and sale of the Notes on April 16, 2020, the Operating Partnership used a portion of the net proceeds therefrom (i) to repay all outstanding borrowings, together with accrued interest and a prepayment premium under the Operating Partnership’s existing senior secured credit facility (the “Existing Credit Facility”), (ii) to cash collateralize all of the letters of credit outstanding under the Existing Credit Facility and (iii) to make a cash deposit of $11.5 million with the administrative agent under the Existing Credit Facility, which may be used by the administrative agent to pay contingent obligations arising under the Financing Agreement (as defined in Item 1.02 below) governing the Existing Credit Facility and which, to the extent not used to pay any such contingent obligations, will be returned to the Operating Partnership in certain circumstances. The Operating Partnership intends to use the remaining net proceeds for general corporate purposes.
Interest on the Notes will be payable semi-annually in cash in arrears on April 15 and October 15 of each year, commencing on October 15, 2020, at a rate of 10.000% per annum. The Notes will mature on April 15, 2025.
The Notes are jointly and severally guaranteed by the Operating Partnership’s sole limited partner, Ferrellgas Partners, L.P. (“Holdings”), the Operating Partnership’s sole general partner, Ferrellgas, Inc. (the “General Partner”), and certain of the Operating Partnership’s subsidiaries (the “Subsidiary Guarantors” and, together with Holdings and the General Partner, the “Guarantors”) on a first lien, senior secured basis. The Notes will also be guaranteed on a first lien, senior secured basis by each of the Operating Partnership’s future restricted subsidiaries, other than future foreign subsidiaries that do not guarantee any of the Issuers’ or the Subsidiary Guarantors’ indebtedness.
The Notes and the guarantees of the Notes have the benefit of a first priority lien (subject to certain exceptions and permitted liens) on the Issuers’ and the Guarantors’ tangible and intangible assets other than certain excluded property, except that the guarantee by Holdings will be secured only by the limited partnership interests in the Operating Partnership held by Holdings. The Notes and the guarantees of the Notes are subject to an intercreditor agreement entered into by the Trustee and Collateral Agent and the securitization agent for the Operating Partnership’s accounts receivable securitization facility, to which the Trustee and Collateral Agent for the Notes will generally be prevented from taking any enforcement or other action with respect to the accounts receivable assets under that facility.
At any time prior to April 15, 2022, the Issuers may redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes, plus a “make-whole” premium as of, and accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, prior to April 15, 2022, the Issuers may, at their option, on any one or more occasions redeem all or a portion of the Notes in an amount not in excess of the net proceeds of certain equity offerings at a redemption price of 110.000% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. On and after April 15, 2022, the Issuers may redeem the Notes, in whole or in part, at the redemption prices (expressed as a percentage of principal amount) set forth below, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, if redeemed during the 12 months beginning on April 15 of the years indicated below:
On April 16, 2020, upon repayment of the outstanding borrowings under the Existing Credit Facility and the making of related payments as described in Item 1.01 above, the Existing Credit Facility and the related Financing Agreement, dated as of May 4, 2018, among the Operating Partnership, the General Partner, certain subsidiaries of the Operating Partnership, as guarantors, the lenders party thereto, TPG Specialty Lending, Inc., as administrative agent, collateral agent and lead arranger, and PNC Bank, National Association, as syndication agent (as amended, the “Financing Agreement”), were terminated, except with respect to provisions of the Financing Agreement that, by its terms, survive the termination of the Financing Agreement.
The information provided under Item 1.01 above is incorporated by reference into this Item 2.03.
| (d) | Exhibits |
| 4.1 | Indenture, dated as of April 16, 2020, among Ferrellgas, L.P. and Ferrellgas Finance Corp., as co-issuers, the guarantors party thereto and Delaware Trust Company, as trustee and collateral agent. |
| 4.2 | Form of 10.000% Senior Secured First Lien Notes (included in Exhibit 4.1). |
FERRELLGAS PARTNERS L P Exhibit
EX-4.1 2 tm2011616d3_ex4-1.htm EXHIBIT 4.1 Exhibit 4.1 Execution Version FERRELLGAS,…
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About Ferrellgas Partners, L.P. (NYSE:FGP)
Ferrellgas Partners, L.P. is engaged in the retail distribution of propane and related equipment sales, and midstream operations, which include crude oil logistics. The Company’s segments include propane and related equipment sales, midstream operations-crude oil logistics, and corporate and other. The propane and related equipment sales segment consists of the distribution of propane and related equipment and supplies. The midstream operations-crude oil logistics segment is engaged in providing crude oil transportation and logistics services. The corporate and other segment includes midstream operations-water solutions. The Company’s two subsidiaries include Ferrellgas Partners Finance Corp. and the operating partnership. Its general partner performs all management functions for the Company and holds general partner interest in Ferrellgas Partners and the operating partnership. It is a distributor of propane and related equipment and supplies to customers in the United States.