Star Gas Partners, a home energy distributor and services provider, announced it has entered into a third amended and restated asset-based revolving credit facility, which expires in July 2020 and provides the ability to borrow up to $300 million ($450 million during the heating season from December through April of each year) on a revolving line of credit for working capital purposes, including the issuance of up to $100 million in letters of credit.
The amended and restated credit facility also provides for a $100 million five year senior secured term loan; proceeds from the term loan will be used to redeem the partnership’s outstanding 8.875% senior notes due 2017. The term loan payment schedule is comprised of $10 million per year plus 25% of excess cash flow, as defined in the credit agreement, with final payment at maturity. Star Gas is expected to see lower interest expense going forward through this new debt structure.
The bank syndicate supporting the credit facility is comprised of thirteen participants, with JPMorgan Chase as administrative agent, Bank of America as co-syndication agent, Citizens Bank as co-syndication agent, Key Bank, Regions Bank and TD Bank as co-documentation agents, and J.P. Morgan Securities, Merrill Lynch and Citizens Bank as joint lead arrangers and joint bookrunners.
Stamford, CT-based Star Gas Partners is a full service energy provider specializing in the sale of home heating products and services to residential and commercial customers.