StoneMor Partners L.P. (NYSE:STON) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry Into a Material Definitive Agreement. |
On March15, 2017, StoneMor Operating LLC (the Operating Company),
a wholly-owned subsidiary of StoneMor Partners L.P. (the
Partnership), the Subsidiaries (as defined in the Amended Credit
Agreement) of the Operating Company (together with the Operating
Company, Borrowers) and Capital One, National Association
(Capital One), as Administrative Agent (in such capacity, the
Administrative Agent) and acting in accordance with the written
consent of the Required Lenders, entered into the First Amendment
to Credit Agreement (the Amendment), which amends the Credit
Agreement (the Original Credit Agreement and, as amended, the
Amended Credit Agreement), dated as of August4, 2016, among the
Borrowers, the Lenders, Capital One, as Administrative Agent,
Issuing Bank and Swingline Lender, Citizens Bank of Pennsylvania,
as Syndication Agent, and TD Bank, N.A. and Raymond James Bank,
N.A., as Co-Documentation Agents. Capitalized terms not otherwise
defined herein have the same meanings as specified in the Amended
Credit Agreement.
The Amendment amends certain terms of the Original Credit
Agreement to:
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extend the deadline by which the Operating Company is required to deliver to the Administrative Agent the Partnerships audited financial statements for the year ended December31, 2016 (2016 Financial Statements) to July15, 2017; |
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extend the deadline by which the Operating Company is required to deliver to the Administrative Agent the Partnerships unaudited financial statements for the quarter ending March31, 2017 (the Q1 2017 Financial Statements) to no later than forty-five (45)days after the date on which the Operating Company delivers the 2016 Financial Statements to the Administrative Agent; |
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require that, until the 2016 Financial Statements have been delivered to the Administrative Agent, the Operating Company deliver to the Administrative Agent financial statements within 35 days after the end of each month for the previous month and year-to-date, certified by a Financial Officer of the Operating Company; |
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increase the maximum Consolidated Leverage Ratio to 4.25:1.00 through September30, 2017, which ratio will revert to 4.00:1.00 effective October1, 2017, subject to the right under the Amended Credit Agreement to increase the Consolidated Leverage Ratio to a maximum of 4.25:1.00 in connection with consummation of a Designated Acquisition; |
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amend the definition of Applicable Rate to (a)limit |
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Financial Statements and the corresponding compliance |
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until January1, 2018, prohibit the Partnership from increasing the regularly scheduled quarterly cash distributions permitted to be made to its partners under the Amended Credit Agreement unless, at the time such distribution is declared and on a pro forma basis after giving effect to the payment of any such distribution the Consolidated Leverage Ratio is no greater than 3.75:1.00; and |
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allow up to an aggregate of $53million in realized losses in the Loan Parties investment portfolio for all periods to be added back for purposes of calculating Consolidated EBITDA. |
Each Lender was paid a fee equal to 0.25% on the amount of such
Lenders Revolving Commitment under the Amended Credit Agreement.
The foregoing description of the Amendment is a summary and is
qualified in its entirety by reference to the Amendment, a copy
of which is filed as Exhibit 10.1 hereto and incorporated by
reference herein.
| Item2.03 |
Creation of a Direct Financial Obligation or Obligation under an Off-Balance Sheet Arrangement of a Registrant |
The information set forth under Item 1.01 of this Current Report
on Form 8-K is incorporated by reference herein.
| Item7.01 | Regulation FD Disclosure |
On March2, 2017, the Partnership filed a Form 12b-25 (the Form 12b-25) with
the U.S. Securities and Exchange Commission (the SEC) indicating
that, for the reasons set forth in the Form 12b-25, the Partnership was
not able to file its Annual Report on Form 10-K for the fiscal
year ended December31, 2016 (the 2016 Form 10-K) on or before March1,
2017, the date on which such report initially was due. As a
result, the Partnership has extended by 15 days the date on which
the 2016 Form 10-K is due to be filed with the SEC to Rule
12b-25(b) promulgated under the Securities Exchange Act of 1934,
as amended (the Exchange Act) in which to file the 2016 Form
10-K. As a result of the Partnerships filing of the Form 12b-25,
the 2016 Form 10-K now is due to be filed with the SEC by
March16, 2017.
As previously disclosed, the
Partnership is reviewing its historic reporting of cemetery
revenues, net of associated direct costs, and deferred revenues.
In light of the procedures being undertaken in connection with
this review, the Partnership believes it is likely that its
review will not be completed in time for it to file the 2016 Form
10-K by March16,
2017. Under the Original Credit Agreement, the failure to deliver
to the Administrative Agent the 2016 Annual
Financial
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Statements that will be
included in the 2016 Form 10-K by March16, 2017 would have
constituted an event of default. In addition, under such
circumstances, the Operating Company would likely not be able to
deliver certain required compliance certificates under the
Original Credit Agreement by March16, 2017, which would have been
a separate event of default under the Credit Agreement. See Item
1.01 of this Current Report on Form 8-K for a discussion of the
Amendment which modified these requirements such that the failure
to deliver the 2016 Annual Financial Statements and the related
compliance certificates will no longer be events of default under
the Amended Credit Agreement.
to the indenture under which
the Partnerships 7.875% Senior Notes due 2021 (the Notes) were
issued (the Indenture), the Partnership is required either to
file the 2016 Form 10-K with the SEC or to furnish to the holders
of the Notes (the Holders), with a copy to the trustee under the
Indenture (the Trustee), the financial information that would be
required to be contained in the 2016 Form 10-K, on or before
March31, 2017. The Partnerships failure to comply with such
obligations would constitute a default under the Indenture. to
the Indenture, the Partnership would have 120 days after written
notice of any such default has been given to the Partnership to
cure such default by filing the 2016 Form 10-K with the SEC. Even
if it is unable to file the 2016 Form 10-K by March31, 2017, the
Partnership believes that it will be able to file the 2016 Form
10-K with the SEC within any such 120-day cure period. However,
there can be no assurance that the Partnership will be able to
file the 2016 Form 10-K with the SEC or otherwise furnish the
information that would be contained therein to the Holders within
such period.
If the Partnership does not
file the 2016 Form 10-K by March16, 2017, it is also likely to
receive a notice from the New York Stock Exchange (the Exchange)
of the procedures with which it must comply to correct this
filing delinquency. These procedures will include the Partnership
contacting the Exchange to discuss the status of the 2016 Form
10-K and issuing a
press release regarding the filing delinquency. Although the
Exchanges guidelines provide for an initial six-month period in
which to cure the filing delinquency, the Exchange reserves the
right to commence suspension or delisting procedures at any time
following a filing delinquency. There can be no assurance that
the Partnership will be able to file the 2016 Form 10-K before
the Exchange acts to suspend trading in or delist the
Partnerships common units.
On March16, 2017, the
Partnership issued a press release announcing, among other
things, the entering into of the Amendment and that, in light of
the procedures being undertaken in connection with the review of
the Partnerships historic reporting of cemetery revenues, net of
associated direct costs, and deferred revenues, the Partnership
believes it is likely that its review will not be completed in
time for it to file the 2016 Form 10-K by March16, 2017. A copy
of the press release is furnished as Exhibit 99.1 to this Current
Report on Form 8-K and is incorporated herein by
reference.
The information in this
Item7.01, including Exhibit 99.1, is being furnished and shall
not be deemed to be filed for the purposes of Section18 of the
Securities Exchange Act of 1934, as amended (the Exchange Act),
or otherwise subject to the liabilities of that Section, nor
shall it be incorporated by reference into any filing made by the
Partnership to the Securities Act of 1933, as amended (the
Securities Act), or the Exchange Act, other than to the extent
that such filing incorporates any or all of such information by
express reference thereto.
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| Item9.01 | Financial Statements and Exhibits |
| (d) | Exhibits. |
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Exhibit Number |
Description |
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| 10.1 |
First Amendment to Credit Agreement, dated as of March15, 2017.* |
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| 99.1 | Press Release dated March16, 2017. ** |
| * | Filed herewith. |
| ** | Furnished herewith. |
Cautionary Note
Regarding Forward-Looking
Statements
Certain statements contained
in this Current Report on Form 8-K, including, but not limited
to, the Partnerships expectations with respect to the timing of
the filing of the 2016 Form 10-K with the SEC and the
Partnerships ability to cure a default under the Indenture within
the time period provided for therein, are forward-looking
statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. Generally, the words
believe, may, will, estimate, continue, anticipate, intend,
project, expect, predict and similar expressions identify these
forward-looking statements. These statements are based on
managements current expectations and estimates. These statements
are neither promises nor guarantees and are made subject to risks
and uncertainties that could cause actual results to differ
materially from those stated or implied by the forward-looking
statements, including, without limitation, risks relating to the
following: additional information arising from the Partnerships
continuing analysis and review of its historical recognition of
revenue and its prior financial statements and the performance of
additional work in this regard, as well as the review and audit
by the Partnerships registered independent public accounting firm
of the Partnerships prior financial statements and the financial
statements to be included in the 2016 Form 10-K; the Partnerships
inability to file its 2016 Form 10-K on or before March16, 2017
and the consequences thereof; the Partnerships inability to cure
a potential default under the Indenture within the time period
provided for therein; litigation and governmental investigations
or proceedings arising out of or related to accounting and
financial reporting matters; the Partnerships ability to maintain
an effective system of internal controls and disclosure controls,
and other risks described in the Partnerships filings with the
SEC. Except as required under applicable law, the Partnership
assumes no obligation to update or revise any forward-looking
statements made herein or any other forward-looking statements
made by it, whether as a result of new information, future events
or otherwise.
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About StoneMor Partners L.P. (NYSE:STON)
StoneMor Partners L.P. owns and operates cemeteries and funeral homes. The Company operates through two segments: Cemetery Operations and Funeral Homes. Its Cemetery Operations segment sells interment rights, caskets, burial vaults, cremation niches, markers and other cemetery related merchandise. Its Funeral Homes segment offers a range of services, including family consultation, final expense insurance products, the removal and preparation of remains, provision of caskets and related funeral merchandise, the use of funeral home facilities for visitation, worship and performance of funeral services, and transportation services. It sells cemetery products and services both at the time of death, which it refers to as at-need, and prior to the time of death, which it refers to as pre-need. It operates approximately 310 cemeteries in over 30 states and Puerto Rico, and approximately 100 funeral homes in over 20 states and Puerto Rico. StoneMor Partners L.P. (NYSE:STON) Recent Trading Information
StoneMor Partners L.P. (NYSE:STON) closed its last trading session up +0.04 at 9.27 with 112,348 shares trading hands.
