NuStar Energy L.P. (NYSE:NS) Files An 8-K Entry into a Material Definitive Agreement

ME Staff 8-k

8 years ago

NuStar Energy L.P. (NYSE:NS) Files An 8-K Entry into a Material Definitive Agreement

Item1.01.

Entry Into a Material Definitive Agreement.

Underwriting Agreement

On April25, 2017, NuStar Energy L.P. (the Partnership), Riverwalk
Logistics, L.P. (the General Partner) and NuStar GP, LLC (NuStar
GP) entered into an underwriting agreement (the Underwriting
Agreement) with Wells Fargo Securities, LLC, Merrill Lynch,
Pierce, Fenner Smith Incorporated, Morgan Stanley Co. LLC and UBS
Securities LLC, as representatives of the several underwriters
named therein (collectively, the Underwriters). to the
Underwriting Agreement, the Partnership agreed to sell 14,000,000
7.625% SeriesB Fixed-to-Floating Rate
Cumulative Redeemable Perpetual Preferred Units(the Firm Units)
representing limited partner interests in the Partnership (the
Preferred Units) at a price to the public of $25.00 per Preferred
Unit. Closing of the issuance and sale of the Preferred Units is
scheduled for April28, 2017. to the Underwriting Agreement, the
Partnership granted the Underwriters a 30-day option to purchase
up to an additional 1,400,000 Preferred Units on the same terms
and conditions as the Firm Units, which option was exercised in
full on April27, 2017.The Partnership will receive net proceeds
from the offering of approximately $372.2million, after deducting
underwriting discounts and commissions and estimated offering
expenses payable by the Partnership. The Partnership expects to
use the net proceeds of the offering, together with the proceeds
from the Partnerships recent common unit offering and recent
senior notes offering, to fund the purchase price and related
fees and expenses of the Partnerships previously announced
acquisition of Navigator Energy Services, LLC (the
Acquisition).Pending such use, the Partnership intends to hold
the net proceeds of the offering of the Preferred Units as
cash.

The offering of
the Preferred Units has been registered under the Securities Act
of 1933, as amended (the Securities Act), to an effective
registration statement on FormS-3 (Registration No.333-212338) of
the Partnership (the Registration Statement), and the prospectus
supplement dated April25, 2017, filed with the Securities and
Exchange Commission to Rule424(b)of the Securities Act.

The Underwriting
Agreement provides that the obligations of the Underwriters to
purchase the Preferred Units are subject to approval of certain
legal matters by counsel to the Underwriters and other customary
conditions. The Partnership has agreed to indemnify the
Underwriters against certain liabilities, including liabilities
under the Securities Act, or to contribute to payments the
Underwriters may be required to make because of any of those
liabilities.

The summary of the
Underwriting Agreement in this report does not purport to be
complete and is qualified by reference to such agreement, which
is filed as Exhibit1.1 hereto and is incorporated by reference
herein.

Eighth
Supplemental Indenture

On April28, 2017,
NuStar Logistics, L.P. (NuStar Logistics), a wholly owned
subsidiary of the Partnership, successfully completed the
issuance and sale of $550million in aggregate principal amount of
its 5.625% Senior Notes due 2027 (the Notes). The Notes are
guaranteed on a full and unconditional basis by each of the
Partnership and NuStar Pipeline Operating Partnership L.P.
(NuPOP), also a wholly owned subsidiary of the Partnership. The
Notes were registered under the Securities Act, to the
Registration Statement.

The Notes are
governed by an Indenture dated as of July15, 2002 (the Original
Indenture), as amended and supplemented by the Third Supplemental
Indenture, dated as of July1, 2005 (the Third Supplemental
Indenture), by and among NuStar Logistics, the Partnership, NuPOP
and The Bank of New York Trust Company, N.A. as trustee (the
Original Indenture, as so amended and supplemented by the Third
Supplemental Indenture, the Senior Indenture), as further amended
and supplemented by the Eighth Supplemental Indenture dated as of
April28, 2017 by and among NuStar Logistics, the Partnership,
NuPOP and Wells Fargo Bank, National Association, as successor
trustee (the Eighth Supplemental Indenture). The Senior
Indenture, as amended and supplemented by the Eighth Supplemental
Indenture, is referred to herein as the Indenture.

Interest on the
Notes will accrue from April28, 2017 and is payable semi-annually
on April28 and October28 of each year, beginning October28, 2017.
The Notes will mature on April28, 2027.

Prior to April28,
2027, NuStar Logistics may, at its option, redeem all or part of
the Notes at any time at a price equal to the greater of 50% of
the principal amount of the Notes then outstanding to be
redeemed, or at a

make-whole price,
in each case plus accrued and unpaid interest. In addition, on or
after January28, 2027, NuStar Logistics may redeem the Notes at a
price equal to 50% of the principal amount of Notes to be
redeemed plus accrued and unpaid interest to the redemption
date.

Furthermore, if
the purchase agreement related to the Acquisition is terminated
prior to the consummation of the Acquisition or the Acquisition
is not consummated on or before August31, 2017 (in either case, a
Mandatory Redemption Event), NuStar Logistics will redeem all and
not less than all of the Notes then outstanding, at a redemption
price equal to 101% of the principal amount of the Notes plus
accrued and unpaid interest to, but not including, the redemption
date (the Special Redemption Price). In addition, if at any time
NuStar Logistics determines that a Mandatory Redemption Event is
likely to occur, then NuStar Logistics may, at its option, redeem
all and not less than all of the Notes then outstanding at the
Special Redemption Price.

The Indenture does
not restrict NuStar Logistics or its subsidiaries from incurring
additional indebtedness, paying distributions on its equity
interests or purchasing or redeeming its equity interests, nor
does it require the maintenance of any financial ratios or
specified levels of net worth or liquidity.

The Notes are
NuStar Logistics senior unsecured obligations and rank equally in
right of payment with all of NuStar Logistics existing and future
unsecured senior indebtedness and senior to its existing and
future subordinated indebtedness. The Notes are irrevocably and
unconditionally guaranteed on a senior unsecured basis by the
Partnership and NuPOP, jointly and severally. The guarantee by
the Partnership ranks equally in right of payment to all of the
Partnerships existing and future unsecured and unsubordinated
indebtedness and senior to its existing and future subordinated
indebtedness. The guarantee by NuPOP ranks equally in right of
payment to all of NuPOPs existing and future unsecured and
unsubordinated indebtedness and senior to its existing and future
subordinated indebtedness.

The Indenture
contains covenants that will limit the ability of NuStar
Logistics, and its subsidiaries, to, among other things, create
liens or enter into sale-leaseback transactions, consolidations,
mergers or asset sales.

If a change of
control (as described below) occurs, then each holder of the
Notes will have the right to require NuStar Logistics to
repurchase all or a portion of that holders Notes at a price
equal to 101% of the aggregate principal amount of the Notes
repurchased, plus any accrued and unpaid interest to the date of
repurchase.

Under the
Indenture, a change of control means an occurrence of one of the
following events:

the direct or indirect lease, sale, transfer, conveyance or
other disposition (other than by way of merger or
consolidation), in one or a series of related transactions,
of (i)all or substantially all of NuStar Logistics assets and
the assets of its subsidiaries taken as a whole or (ii)all of
the assets of the Partnership and its subsidiaries taken as a
whole, to any person (as that term is used in
Section13(d)(3)of the Securities Exchange Act of 1934 (the
Exchange Act)), which is followed by a decrease in the rating
of the Notes by both Standard Poors Ratings Services, a
division of the McGraw-Hill Companies, Inc. and Moodys
Investors Service,Inc. by one or more gradations of the Notes
(a Ratings Decline) within 60 days;

the adoption of a plan relating to NuStar Logistics or the
Partnerships liquidation or dissolution, or the removal of
(i)NuStar Logistics general partner by NuStar Logistics
limited partners, (ii)the General Partner by Partnerships
limited partners, or (iii)the general partner of the General
Partner by the limited partners of the General Partner; or

the consummation of any transaction (including, without
limitation, any merger or consolidation) which results in
that person (as that term is used in Section13(d)(3)of the
Exchange Act), other than NuStar GP Holdings, LLC (NuStar GP
Holdings), the Partnership and each person that is a direct
or indirect subsidiary of NuStar GP Holdings or the
Partnership, becomes the beneficial owner, directly or
indirectly, of more than 50% of the voting stock of NuStar
Logistics, NuStar Logistics general partner, the Partnership,
the General Partner or the general partner of the General
Partner, in each case measured by voting power rather than
number of shares, units or the like, which occurrence is
followed by a Ratings Decline within 60 days thereafter.

Events of default
under the Indenture include:

failure to pay interest on the Notes for 30 days;

failure to pay the principal of or any premium on the Notes
when due;

failure to perform any other covenant or warranty in the
Indenture (other than a term, covenant or warranty a default
in whose performance or whose breach is specifically dealt
with in the Indenture or which has expressly been included in
the Indenture solely for the benefit of another series of
securities) that continues for 60 days after written notice
is given to NuStar Logistics by the Trustee or to NuStar
Logistics and the Trustee by the holders of at least 25% in
principal amount of the outstanding Notes, specifying such
default and requiring it to be remedied and stating that such
notice is a Notice of Default under the Indenture;

certain events of bankruptcy, insolvency or reorganization of
NuStar Logistics;

failure to comply for 90 days with the repurchase provisions
described in connection with a change of control; or

failure to pay any indebtedness of NuStar Logistics for
borrowed money in excess of $50million, whether at stated
maturity (after the expiration of any applicable grace
periods) or upon acceleration and maturity thereof, if such
indebtedness is not discharged, or such acceleration is not
annulled, within 10 days after written notice is given to
NuStar Logistics by the Trustee or to NuStar Logistics and
the Trustee by the holders of at least 25% in outstanding
principal amount of the Notes, specifying such default and
requiring it to be remedied, and stating that such notice is
a Notice of Default under the Indenture.

If an event of
default occurs and is continuing, the Trustee or the holders of
not less than 25% in aggregate principal amount of the Notes may
declare the entire principal of, and accrued but unpaid interest,
if any, on all the Notes to be due and payable immediately. If
this happens, subject to certain conditions, the holders of a
majority of the aggregate principal amount of the Notes can
rescind the declaration. If an event of default relating to
certain events of bankruptcy, insolvency or reorganization
occurs, the entire principal amount of the Notes shall be due and
payable immediately without further action or notice.

The description of
the Indenture contained in this Current Report on Form8-K does
not purport to be complete and is qualified in its entirety by
reference to the full text of the Original Indenture, the Third
Supplemental Indenture and the Eighth Supplemental Indenture,
incorporated by reference herein from Exhibits 4.2, 4.3 and 4.4,
respectively.

Item3.03.

Material Modification to Rights of Security
Holders.

The information
set forth under Item 5.03 is incorporated by reference into this
Item 3.03.

Item5.03.

Amendments to Articles of Incorporation or Bylaws;
Change in Fiscal Year.

On April28, 2017,
the Partnership executed the Fifth Amended and Restated Agreement
of Limited Partnership of NuStar Energy L.P. (the Partnership
Agreement) for the purpose of defining the preferences, rights,
powers and duties of holders of the Preferred Units in connection
with the offering of Preferred Units that closed on April28,
2017. The Partnership Agreement also incorporates the amendments
described below under IDR Waiver.

Series
B Preferred Units

The Preferred
Units rank senior to the Partnerships common units with respect
to the payment of distributions and distribution of assets upon
liquidation, dissolution and winding up. The Preferred Units have
no stated maturity and are not subject to mandatory redemption or
any sinking fund and will remain outstanding indefinitely unless
repurchased or redeemed by the Partnership or converted into its
common units in connection with a change of control.

Holders of
Preferred Units issued in the offering will be entitled to
receive, when, as and if declared by the General Partner, out of
legally available funds for such purposes, quarterly cumulative
cash distributions. Distributions on Preferred Units will be
cumulative from the date of issue and payable quarterly on the
15th day of each of March, June, September and December,
commencing September15, 2017. Distributions on the Preferred
Units will be payable from and including the date of original
issue to, but not including, June15, 2022, at a rate equal to
7.625% per annum of the $25.00 stated liquidation preference per
unit (equal to $1.90625 per unit per annum). On and after June15,
2022, distributions on the Preferred Units will accumulate at a
percentage of the $25.00 liquidation preference equal to an
annual floating rate of the three-month LIBOR plus a spread of
5.643%.

At any time on or
after June15, 2022, the Partnership may, at its option, redeem
the Preferred Units, in whole or in part, from any source of
funds legally available for such purpose, by paying $25.00 per
unit plus an amount equal to all accumulated and unpaid
distributions thereon to the date of redemption, whether or not
declared. In addition, the Partnership may redeem the Preferred
Units following certain changes of control, as well as at any
time within 120 days after the conclusion of any review or appeal
process instituted by the Partnership following the occurrence of
a rating event, each as described in the Partnership Agreement.
If the Partnership does not exercise the option to redeem
following a change of control, then the holders of the Preferred
Units have the option to convert the Preferred Units into a
number of common units per Preferred Unit as set forth in the
Partnership Agreement. If the Partnership exercises its
redemption rights relating to any Preferred Units following a
change of control, the holders of those Preferred Units will not
have the conversion right described above with respect to the
Preferred Units called for redemption.

Holders of
Preferred Units will have only limited voting rights with respect
to potential amendments to the Partnership Agreement that have a
material adverse effect on the existing terms of the Preferred
Units and in certain other limited circumstances or as required
by law.

IDR
Waiver

The Partnership
Agreement also provides for a waiver of quarterly distributions
made to the General Partner, as holder of the Partnerships
incentive distribution rights (IDRs), by the amount equal to the
excess in available cash attributable to any common units of the
Partnership issued from the date of the purchase agreement
related to the Acquisition through the end of the ten consecutive
quarter period anticipated to begin with the distribution in
respect of the second quarter of 2017, subject to an aggregate
cap of $22.0million. If for any reason the Acquisition is not
consummated, the waiver of distributions on the IDRs will not
become effective.

The description of
the Partnership Agreement contained in this Item 5.03 is
qualified in its entirety by reference to the full text of the
Partnership Agreement, which is filed as Exhibit 3.1 hereto and
is incorporated by reference herein.

Item9.01

Financial Statements and Exhibits.

(d)	Exhibits


Exhibit No.		Description

1.1		Underwriting Agreement, dated April25, 2017, by and among NuStar Energy L.P., Riverwalk Logistics, L.P., NuStar GP, LLC and the Underwriters named therein.

3.1		Fifth Amended and Restated Agreement of Limited Partnership of NuStar Energy L.P.

4.1		Specimen Unit Certificate for the Series B Cumulative Redeemable Perpetual Preferred Units (attached as Exhibit C to the Fifth Amended and Restated Agreement of Limited Partnership of NuStar Energy L.P. filed as Exhibit 3.1 hereto).

4.2*		Indenture, dated as of July15, 2002, among Valero Logistics Operations, L.P., as Issuer, Valero L.P., as Guarantor, and The Bank of New York, as Trustee, relating to Senior Debt Securities (incorporated by reference to Exhibit4.1 to NuStar Energy L.P.s Current Report on Form8-K filed July15, 2002 (File No.001-16417)).

4.3*		Third Supplemental Indenture, dated as of July1, 2005, to Indenture dated as of July15, 2002, as amended and supplemented, among Valero Logistics Operations, L.P., Valero L.P., Kaneb Pipe Line Operating Partnership, L.P., and The Bank of New York Trust Company, N.A. (incorporated by reference to Exhibit4.02 to NuStar Energy L.P.s Quarterly Report on Form10-Q for the quarter ended June30, 2005 (File No.001-16417)).

4.4		Eighth Supplemental Indenture, dated as of April28, 2017, among NuStar Logistics, L.P., as Issuer, NuStar Energy L.P., as Guarantor, NuStar Pipeline Operating Partnership L.P., as Affiliate Guarantor, and Wells Fargo Bank, National Association, as Successor Trustee.

5.1		Opinion of Andrews Kurth Kenyon LLP regarding legality of the Preferred Units.

5.2		Opinion of Andrews Kurth Kenyon LLP regarding legality of the Notes.

8.1		Opinion of Andrews Kurth Kenyon LLP regarding tax matters.

23.1		Consents of Andrews Kurth Kenyon LLP (included in its opinions filed as Exhibits 5.1, 5.2 and 8.1).

*	Incorporated by reference.

About NuStar Energy L.P. (NYSE:NS)
NuStar Energy L.P. is engaged in the transportation of petroleum products and anhydrous ammonia; the terminaling and storage of petroleum products, and the marketing of petroleum products. The Company’s operating segments include pipeline, storage and fuels marketing. The pipeline segment consists of the transportation of refined petroleum products, crude oil and anhydrous ammonia. The storage segment includes terminal and storage facilities that provide storage, handling and other services for petroleum products, crude oil, specialty chemicals and other liquids. The fuels marketing segment involve the purchase of crude oil, fuel oil, bunker fuel, fuel oil blending components and other refined products for resale. The Company’s assets include approximately 5,500 miles of refined product pipelines with over 20 associated terminals; over 2,000 miles of anhydrous ammonia pipelines; approximately 1,200 miles of crude oil pipelines, and over 50 terminal and storage facilities. NuStar Energy L.P. (NYSE:NS) Recent Trading Information
NuStar Energy L.P. (NYSE:NS) closed its last trading session down -0.20 at 48.50 with 824,151 shares trading hands.