Blueknight gets five-year $450 million amended and restated revolver

By Wendy Van Sickle

Columbus, Ohio, May 12 – Blueknight Energy Partners, LP entered into an amended and restated credit agreement on Thursday with Wells Fargo Bank, NA as administrative agent, according to an 8-K filed with the Securities and Exchange Commission.

The new agreement, which expires May 11, 2022, provides for an up to $450 million revolving line of credit. The company may increase the facility to $600 million, subject to approval of existing lenders or addition of new lenders.

Obligations are secured by first-priority liens on substantially all of the partnership’s assets and its existing subsidiaries, which are also the guarantors under the agreement.

Borrowings bear interest at Libor plus 200 basis points to 300 bps, with the actual margin based on the company’s consolidated total leverage ratio. The company will also pay a commitment fee of 37.5 bps to 50 bps and a letter-of-credit fee equal to the applicable margin.

Wells Fargo Securities, LLC, RBC Capital Markets and JPMorgan Chase Bank, NA are the co-lead arrangers and joint bookrunners.

Capital One, NA, Natixis, Compass Bank and U.S. Bank NA are the co-syndication agents. Cadence Bank, NA and Regions Bank are co-documentation agents for the facility.

The new agreement includes financial covenants that will be tested on a quarterly basis, based on a rolling four-quarter period.

The maximum permitted consolidated total leverage ratio is 4.75 to 1.00, provided that the maximum consolidated total leverage ratio is 5.25 to 1.00 from and after (i) the last day of the fiscal quarter immediately preceding the fiscal quarter in which a specified acquisition occurs to and including the last day of the second full fiscal quarter following the fiscal quarter in which such specified acquisition occurred and (ii) the date on which the partnership issues qualified senior notes in a principal amount equal to or greater than $200 million.

The maximum permitted consolidated senior secured leverage ratio is 3.50 to 1.00, but this covenant is only tested from and after the date on which the partnership issues qualified senior notes with a $200 million or more principal amount.

The minimum permitted consolidated interest coverage ratio is 2.50 to 1.00.

The loan may be prepaid at any time without premium or penalty.

At closing, the company had about $307.6 million of outstanding borrowings and $1.5 million outstanding letters of credit under the new agreement, according to the filing.

Based in Oklahoma City, Blueknight provides terminalling, storage, processing, gathering and transportation services to the energy industry.

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