Delek Logistics raises credit facility to $1.2 billion, extends to 2027

By Mary-Katherine Stinson

Lexington, Ky., Oct. 17 – Delek Logistics Partners, LP and all its subsidiaries entered into a fourth amended and restated senior secured revolving credit agreement effective Oct. 13 with Fifth Third Bank, NA as administrative agent and a syndicate of lenders, according to an 8-K filing with the Securities and Exchange Commission.

The agreement increased the total commitments to $1.2 billion, consisting of senior secured revolving commitments totaling $900 million (eliminating a Canadian dollar tranche) with a $115 million sublimit for letters of credit and a $25 million sublimit for swingline loans and a new senior secured term loan facility for $300 million.

The accordion feature of the revolver was reset to allow increased commitments up to $1.15 billion with the agreement of the partnership and one or more of the lenders.

The maturity date of the revolving facility was extended to Oct. 13, 2027.

It was provided for the term facility be drawn in full on Oct. 13, with a maturity date of Oct. 13, 2024 and with a prepayment requirement for the proceeds obtained from the issuance of certain senior notes.

Borrowings under the revolver bear interest at SOFR plus a credit spread adjustment of either 10 basis points for one month or 25 bps for three-month interest periods plus an applicable margin ranging from 200 bps to 300 bps depending on the partnership’s total leverage ratio. There is a commitment fee ranging from 30 bps to 50 bps for unused revolving commitments, also depending on the partnership’s total leverage ratio.

Borrowings under the term facility bear interest at SOFR plus either the 10 bps or 25 bps adjustment plus an applicable margin of 350 bps for the first year and 400 bps for the second year of the term facility.

Similar to the partnership’s 2018 facility, the new agreement contains financial covenants restricting the total leverage ratio not to exceed 5.25x on the last day of any quarter provided that during the temporary increase period related to the 3 Bear acquisition it does not exceed 5.5x. The senior leverage ratio cannot exceed 3.75x on the last day of each quarter. The interest coverage ratio must be less than 2x on the last day of each quarter.

Fifth Third, BofA Securities Inc., PNC Bank Capital Markets LLC, MUFG Bank, Ltd., Wells Fargo Bank, NA, Citizens Bank, NA and Royal Bank of Canada are the co-syndication agents and the joint lead arrangers and joint bookrunners.

Barclays, U.S. Bank NA, Regions Bank and Truist Bank are the co-documentation agents.

Fifth Third Bank, NA, BofA Securities Inc., PNC Bank Capital Markets LLC, MUFG Bank, Ltd., Wells Fargo Bank, NA, Citizens Bank, NA and Royal Bank of Canada are the co-syndication agents.

The agreement amends and restates the senior secured facility that the partnership entered on Sept. 28, 2018.

Brentwood, Tenn.-based Delek is an energy master limited partnership.

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