Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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Revolving Credit Agreement
On January 28, 2022, NuStar Logistics, L.P. (“NuStar Logistics”), a wholly owned subsidiary of NuStar Energy L.P. (“NuStar Energy”), NuStar Energy,
Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto amended and restated NuStar Logistics’ amended and restated unsecured 5-year revolving credit agreement dated as of October 29, 2014 (as amended prior to
giving effect to such amendment and restatement, the “Existing Credit Agreement”) by entering into a Second Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”).
The terms of the Amended and Restated Credit Agreement (including the representations and warranties, covenants and events of default) are based off
the Existing Credit Agreement, incorporating the following changes (among others):
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extending the maturity date of the credit facility from October 27, 2023 to April 27, 2025;
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increasing maximum amount of letters of credit capable of being issued under the Amended and Restated Credit Agreement from $400 million under the Existing Credit Agreement to $500 million;
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removing and replacing LIBOR benchmark provisions with customary Term SOFR benchmark provisions;
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removing the 0.50x increase permitted in our consolidated debt coverage ratio for certain rolling periods in which an acquisition for aggregate net consideration of at least $50.0 million occurs; and
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introducing baskets and exceptions to certain negative covenants, including the negative covenants restricting other indebtedness, liens, investments, restricted payments and transactions with affiliates.
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Consistent with the Existing Credit Agreement, the Amended and Restated Credit Agreement has an aggregate borrowing capacity of up to $1.0 billion.
Outstanding borrowings under the Amended and Restated Credit Agreement bear interest at a varying interest rate that fluctuates with an alternate base rate (equal to the greater of the prime rate, the Federal
funds rate plus 1/2 of 1% and 1-month Term SOFR plus 1%), or at the election of NuStar Logistics, at a rate based on Term SOFR for certain time periods. The interest rate is subject to adjustment if our debt rating is downgraded (or upgraded) by
certain credit rating agencies.
NuStar Logistics’ obligations under the Amended and Restated Credit Agreement are guaranteed by NuStar Energy and NuStar Pipeline Operating
Partnership L.P., a wholly owned subsidiary of NuStar Energy. As of the closing date of the Amended and Restated Credit Agreement, NuStar Logistics had $140 million of borrowings and $4.7 million of letters of credit outstanding under the Amended
and Restated Credit Agreement.
The foregoing summary of the Amended and Restated Credit Agreement does not purport to be complete and is subject to, and qualified in its entirety
by, the full text of the Amended and Restated Credit Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Sixth Amendment to Receivables Financing Agreement
On January 28, 2022, NuStar Energy entered into a Sixth Amendment to Receivables Financing Agreement, by and among NuStar Finance LLC, as Borrower,
NuStar Energy, as initial Servicer, PNC Bank, National Association, as administrative agent, and the other parties thereto (the “Receivables Financing Agreement Amendment”). The Receivables Financing Agreement Amendment amends the Receivables
Financing Agreement dated as of June 15, 2015 (as amended from time to time) (the “Receivables Financing Agreement”) to, among other things: (1) extend the Scheduled Termination Date (as defined in the Receivables Financing Agreement) from
September 20, 2023 to January 31, 2025; (2) reduce the floor rate in the calculation of our borrowing rates and (3) replace provisions related to the LIBOR rate of interest with references to SOFR rates of interest.
The foregoing summary is qualified in its entirety by the text of the Receivables Financing Agreement Amendment, a copy of which is filed as Exhibit
10.2 to this Current Report on Form 8-K and incorporated herein by reference.