Sprague Resources signed a second amended and restated senior secured credit agreement with MUFG Bank as administrative agent. MUFG Bank and BNP Paribas are serving as co-collateral agents for the facility. BNP Paribas, Citizens Bank, Société Générale, Wells Fargo Bank and Coöperatieve Rabobank New York Branch are serving as co-syndication agents. ABN AMRO Capital USA and Santander Bank are serving as co-documentation agents. MUFG Bank, BNP Paribas, Citizens Bank, Société Générale, Wells Fargo Securities and Coöperatieve Rabobank New York Branch are serving as joint lead arrangers, joint bookrunners and financial institutions party thereto. The new credit agreement matures on May 19, 2022.
Sprague and certain of its subsidiaries are guarantors of the obligations under the credit agreement. Obligations under the credit agreement are secured by substantially all of the assets of Sprague, the borrowers and the subsidiary guarantors.
“We’d like to thank our participating lenders who continue to support Sprague and put forth such a strong effort to get this facility closed,” David Long, CFO of Sprague Resources, said. “Closing a credit facility in today’s difficult environment speaks to the confidence of our lending group in Sprague’s continuing strength and long-term viability.”
The revolving credit facilities under the credit agreement contain:
- A committed U.S. dollar revolving working capital facility of up to $465 million, subject to borrowing base limits, which will be used for working capital loans and letters of credit
- An uncommitted U.S. dollar revolving working capital facility of up to $200 million, subject to borrowing base limits and the sole discretion of the lenders, which will be used for working capital loans and letters of credit
- A multicurrency revolving working capital facility of up to $85 million, subject to borrowing base limits, which will be used for working capital loans and letters of credit
- A revolving acquisition facility of up to $430 million, subject to borrowing base limits, which will be used for loans and letters of credit to fund capital expenditures, acquisitions and other general corporate purposes
- Subject to certain conditions, including the receipt of additional commitments from lenders, the ability to increase the U.S. dollar revolving working capital facility to up to $1.2 billion and the multicurrency revolving working capital facility to up to $320 million, subject to a maximum combined increase in commitments for both facilities of $470 million in the aggregate
Additionally, subject to certain conditions, the revolving acquisition facility may be increased to up to $750 million.
Indebtedness under the credit agreement bears interest, at the borrowers’ option, at a rate per annum equal to either (i) the Eurocurrency Rate (which is the LIBOR rate for loans denominated in U.S. dollars and CDOR for loans denominated in Canadian dollars, in each case adjusted for certain regulatory costs, and in each case with a floor of 0.5%) for interest periods of one, two, three or six months plus a specified margin or (ii) an alternate rate plus a specified margin.
Baker Botts represented Sprague in the transaction.
Sprague Resources purchases, stores, distributes and sells refined petroleum products and natural gas.