The five-year facility replaces the current $575 million senior secured revolving credit facility that was scheduled to mature in October 2018. It includes a $300 million cash flow revolver supported by commitments from TPG and PNC Bank, as well as a $275 million term loan.
As of the closing date, the revolver will have no outstanding borrowings and provides for a transition of undrawn letters of credit issued and outstanding of approximately $100 million seamlessly to the new facility.
The term loan will be used to repay the outstanding amounts on the company’s terminating bank credit facility, fees, and expenses associated with the new facility, and will result in approximately $75 million of surplus cash on Ferrellgas’ balance sheet.
“We are pleased with this facility and our partnership with TPG Specialty Lending and PNC,” said James E. Ferrell, interim CEO and president of Ferrellgas. “The facility provides us with substantial liquidity, a long-term source of competitively priced capital and reasonable covenants to run our business and take advantage of opportunities to continue our recent trend of EBITDA growth.”
Ferrellgas continues to work on closing a multi-year extension of its accounts receivable securitization facility and expects to close on that facility in the near term.
Bracewell served as legal advisor and Durham Capital as financial advisor to Ferrellgas. Schulte Roth & Zabel served as legal advisor to the lending group.
Ferrellgas Partners serves propane customers in all 50 states, the District of Columbia, and Puerto Rico, and provides midstream services to major energy companies in the U.S.