Calumet enters new supply offtake agreement, upsizes ABL

By Marisa Wong

Los Angeles, Jan. 24 – Calumet Specialty Products Partners, LP announced two financing transaction updates on Tuesday.

These financings replace the company’s previous supply and offtake agreements (SOA) that provided financing for its Shreveport and Montana refining facilities.

The Shreveport SOA has been replaced with a new SOA entered into with J. Aron on Jan. 17. The prior SOA dated June 19, 2017 among Calument, Calumet Shreveport, Calumet Refining and Macquarie Energy North America Trading Inc. was terminated on Jan. 17, according to an 8-K filing with the Securities and Exchange Commission.

Additionally, the company increased the size of its asset-backed loan facility to support the inventories previously provided for under the Montana refining SOA, according to the press release. The company also included the refinery assets at Great Falls to increase the availability under the ABL facility.

Specifically, Calumet entered into a fourth amendment to its third amended and restated credit agreement dated Feb. 23, 2018 on Jan. 17. The fourth amendment amended some covenants and other provisions and provides for an increase in the facility size and adjustment to the pricing, as well as the inclusion of certain refinery assets of Calumet Montana Refining, LLC in the determination of the borrowing base.

Total revolver commitments come to $600 million, and the FILO commitment amounts to $50 million.

The applicable margin for daily SOFR revolving loans ranges from 150 basis points to 200 bps, and the applicable margin for daily SOFR FILO loans ranges from 250 bps to 300 bps. The margin varies based on availability.

The company expects to satisfy the conditions to the amendment on or before Feb. 15.

“Together, these financings provide a wholistic, simpler and more cost-effective solution to managing our inventory and working capital needs while also increasing the availability under our ABL,” the company said on Tuesday.

The producer of fuel products and specialty hydrocarbon products is based in Indianapolis.

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