Intrepid Potash,Inc. (NYSE:IPI) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement
Amendment to Note Purchase Agreement
On June30, 2017,Intrepid Potash,Inc. (“Intrepid”) entered into a Fourth Amendment to Amended and Restated Note Purchase Agreement (the “NPA Amendment”) with the noteholders named therein (the “Noteholders”). The NPA Amendment amends the Amended and Restated Note Purchase Agreement, dated as of October30, 2016, by and among Intrepid and the Noteholders (as amended, restated, supplemented, or otherwise modified from time to time, the “Note Purchase Agreement”).
The NPA Amendment provides for (1)the termination of the engagement of a financial advisor engaged to assist in advising the Noteholders and (2)a prepayment by Intrepid of a principal amount of $23 million of the notes under the Note Purchase Agreement (the “Notes”), together with accrued interest and a make-whole amount, in connection with the closing of the NPA Amendment. The $23 million prepayment was made on June30, 2017, using cash on hand. As of June30, 2017,Intrepid had not made any sales of its common stock under its previously announced at-the-market offering program.
The NPA Amendment also modifies the Note Purchase Agreement to, among other things, (1)alter the methodology for determining the variable interest rate for the Notes, though the interest rates will continue to be adjusted quarterly based on Intrepid’s financial performance and certain financial covenant levels, (2)require a mandatory prepayment of a principal amount of $6 million of the Notes, together with accrued interest and a make-whole amount, on or prior to December31, 2017, and a second mandatory prepayment of a principal amount of $10 million of the Notes, together with accrued interest and a make-whole amount, on or prior to December31, 2018, and (3)modify certain terms regarding the mandatory redemptions or offers of prepayment to the Noteholders.
Intrepid originally issued $150 million principal amount of the Notes in 2013. During the fourth quarter of 2016 and the first quarter of 2017,Intrepid repaid $61 million principal amount of the Notes, leaving a balance of $89 million as of March31, 2017. After the $23 million prepayment described above,Intrepid had $66 million principal amount of the Notes outstanding as of June30, 2017. After Intrepid makes the additional mandatory prepayments of $6 million and $10 million principal amount of the Notes on or prior to December31, 2017, and December31, 2018, respectively, the outstanding balance of the Notes will be $50 million.
Except as amended by the NPA Amendment, the terms of the Note Purchase Agreement remain unchanged. The description set forth above is qualified in its entirety by the NPA Amendment, a copy of which is filed as Exhibit10.1 to this report and incorporated by reference into this Item 1.01.
Amendment to Credit Agreement
On June30, 2017,Intrepid and certain of its subsidiaries entered into a First Amendment to Credit Agreement (the “Credit Agreement Amendment”) with Bank of Montreal (“BMO”), as administrative agent, and the other lenders party thereto. The Credit Agreement Amendment amends the Credit Agreement, dated as of October30, 2016, by and among Intrepid, BMO, and the other lenders party thereto (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”).
The Credit Agreement Amendment modifies the Credit Agreement to, among other things, (1)extend the maturity date under the Credit Agreement to October31, 2019, (2)allow for the prepayments of the Notes contemplated by the NPA Amendment and the Note Purchase Agreement, as amended by the NPA Amendment, and (3)permit up to $10 million of borrowings under the Credit Agreement to be used by Intrepid to make payments on the Notes.
Except as amended by the Credit Agreement Amendment, the terms of the Credit Agreement remain unchanged. The description set forth above is qualified in its entirety by the Credit Agreement Amendment, a copy of which is filed as Exhibit10.2 to this report and incorporated by reference into this Item 1.01.