HOLLY ENERGY PARTNERS, L.P. (NYSE:HEP) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
On July27, 2017, Holly Energy Partners, L.P. (the “Borrower”) (a) assumed the indebtedness and other obligations owed by Holly Energy Partners-Operating, L.P. (“HEP Operating”),its wholly-owned subsidiary, to that certain Second Amended and Restated Credit Agreement dated as of February14, 2011 (as amended prior to the date hereof, the “Prior Credit Agreement”) by and among HEP Operating, as borrower, Wells Fargo Bank, National Association, as administrative agent and an issuing bank, and the financial institutions party thereto as lenders and (b)entered into a Third Amended and Restated Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent and an issuing bank, and the financial institutions party thereto as lenders.
The Credit Agreement provides for a five-year senior secured revolving credit facility that may be used for revolving credit loans and letters of credit in an initial maximum principal amount not to exceed $1.4billion. The sublimit for letters of credit under the Credit Agreement is $50million, which sublimit amount can be increased at the Borrower’s election up to $150million upon satisfaction of certain terms and conditions specified in the Credit Agreement. The Credit Agreement is available for general partnership purposes.
The Borrower has the right to request an increase in the maximum amount of the Credit Agreement, up to $1.7billion. The request will become effective if (a)certain customary conditions specified in the Credit Agreement are met and (b)one or more existing lenders under the Credit Agreement or other financial institutions approved by the administrative agent commit to lend the increased amounts under the Credit Agreement.
Prior to the Investment Grade Date (as defined in the Credit Agreement), the Borrower’s obligations under the Credit Agreement are secured by substantially all of the assets of the Borrower and its material, wholly-owned subsidiaries. Indebtedness under the Credit Agreement is guaranteed by the material, wholly-owned subsidiaries of the Borrower.
The Borrower may prepay all loans at any time without penalty, except for payment of certain breakage and related costs.
Indebtedness under the Credit Agreement bears interest, at the Borrower’s option, at either (a)the reference rate as announced by the administrative agent plus an applicable margin (ranging from 0.50% to 1.50%) or (b)at a rate equal to the interest rate per annum reported by Bloomberg L.P. in its index of rates applicable to Dollar deposits in the London interbank market plus an applicable margin (ranging from 1.50% to 2.50%). In each case, the applicable margin is based upon the Total Leverage Ratio (as defined in the Credit Agreement) for the four most recently completed fiscal quarters. The Borrower incurs a commitment fee on the unused portion of the Credit Agreement at a rate ranging from 0.25% to 0.50% based upon the Total Leverage Ratio for the four most recently completed fiscal quarters. The initial maturity date of the Credit Agreement is July27, 2022.
The Credit Agreement imposes certain requirements, including: limitations on distributions to the Borrower’s equityholders; limitations on our ability to incur debt, make loans, acquire other companies, change the nature of our business, enter into a merger or consolidation, or sell assets; and covenants that require maintenance of a specified Total Leverage Ratio, and prior to the Investment Grade Date, a specified EBITDA to interest expense ratio and senior debt to EBITDA ratio.
Upon the occurrence, and during the continuance, of an event of default, including but not limited to nonpayment of principal when due, failure to perform or observe certain terms, covenants or agreements under the Credit Agreement, and certain defaults of other indebtedness, the administrative agent may terminate the obligation of the lenders under the Credit Agreement to make advances and issue letters of credit and declare any outstanding obligations under the Credit Agreement immediately due and payable. In addition, in the event of insolvency, the obligation of each lender to make advances and issue letters of credit shall automatically terminate and any outstanding obligations under the Credit Agreement shall immediately become due and payable.
The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
| Item 1.01 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
The information set forth in Item 1.01 is incorporated into this Item 1.01 by reference.
| Item 1.01 | Financial Statements and Exhibits. |
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ExhibitNo. |
Description |
| 10.1 | Third Amended and Restated Credit Agreement dated July27, 2017, among Holly Energy Partners, L.P., as borrower, Wells Fargo Bank, National Association, as administrative agent, an issuing bank and a lender, and certain other lenders party thereto. |
HOLLY ENERGY PARTNERS LP ExhibitEX-10.1 2 d377959dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 EXECUTION COPY Unlisted CUSIP Number: 43576UAA5 Revolving Credit CUSIP Number: 43576UAB3 THIRD AMENDED AND RESTATED CREDIT AGREEMENT among HOLLY ENERGY PARTNERS,…To view the full exhibit click here
About HOLLY ENERGY PARTNERS, L.P. (NYSE:HEP)
Holly Energy Partners, L.P., (HEP) is engaged in the business of operating a system of petroleum product and crude pipelines, storage tanks, distribution terminals and loading rack facilities. The Company operates in West Texas, New Mexico, Utah, Nevada, Oklahoma, Wyoming, Kansas, Arizona, Idaho and Washington. The Company’s assets include pipelines; refined product terminals and refinery tankage, and refinery processing units. Holly Logistic Services, L.L.C. (HLS) is a subsidiary of HollyFrontier Corporation (HFC), which is the general partner of HEP and manages HEP. The Company owns and operates petroleum product and crude pipelines, terminal, tankage and loading rack facilities, and refinery processing units that support the refining and marketing operations of HFC in the Mid-Continent, Southwest and Rocky Mountain regions of the United States and Alon USA, Inc.’s (Alon) refinery in Big Spring, Texas.