Star Group L.P. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Financial Statements and Exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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CURRENT REPORT
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Item 1.01 |
Entry into a Material Definitive Agreement. |
On September 27, 2024, Star Group, L.P., a Delaware limited partnership (the “Company”), entered into a seventh amended and restated asset-based credit facility agreement (the “Credit Agreement”) with a bank syndicate comprised of ten participants acting in various capacities, which expires in September 2029 and provides the borrower under the Credit Agreement (a subsidiary of the Company) with an ability to borrow up to $400 million ($475 million during the heating season from December through April of each year) on a revolving line of credit for working capital purposes, including the issuance of up to $25 million in letters of credit. The Credit Agreement also provides for a $210 million five year senior secured term loan (the “Term Loan”); proceeds from the term loan will be used to repay $132.1 million in existing outstanding debt with the $77.9 million balance to be invested and available for certain identified acquisitions and general corporate purposes.
As was the case under the prior revolving credit facility, under the Credit Agreement, the Company can elect to increase the revolving credit facility size by $200 million without the consent of the bank group. However, the bank group is not obligated to fund the $200 million increase. If the bank group elects not to fund the increase, the Company can add additional lenders to the group, with the consent of the Agent (as defined in the Credit Agreement), which shall not be unreasonably withheld. Obligations under the Credit Agreement are guaranteed by the Company and its subsidiaries and are secured by liens on substantially all of the Company’s and its subsidiaries’ assets including accounts receivable, inventory, general intangibles, real property, fixtures and equipment.
All amounts outstanding under the Credit Agreement become due and payable on the facility termination date of September 27, 2029. The Term Loan is repayable in quarterly payments of $5.3 million, plus an annual payment equal to 25% of the annual Excess Cash Flow as defined in the Credit Agreement (an amount not to exceed $4 million annually), less certain voluntary prepayments made during the year, with final payment at maturity.
The interest rate on the revolving line of credit and the term loans under the Credit Agreement is based on a margin over Adjusted Term SOFR or a base rate.
The Commitment Fee on the unused portion of the revolving line of credit is 0.30% from December through April, and 0.20% from May through November.
The Credit Agreement requires the Company to meet certain financial covenants, including a “fixed charge coverage ratio” (as defined in the Credit Agreement) of not less than 1.1:1.0 as long as the Term Loan is outstanding or revolving loan availability is less than the greater of (i) 12.5% of the Line Cap (defined as the lesser of (A) the facility size and (B) the borrowing base) and (ii) $35,000,000. In addition, as long as the Term Loan is outstanding, a “senior secured leverage ratio” (as defined in the Credit Agreement) at any time cannot be more than 3.0:1.0 as calculated during the quarters ending June or September, and at any time no more than 5.5:1.0 as calculated during the quarters ending December or March.
Certain restrictions are also imposed by the Credit Agreement, including restrictions on the Company’s ability to incur additional indebtedness, to pay distributions to unitholders, to pay certain inter-company dividends or distributions, make investments, grant liens, sell assets, make acquisitions and engage in certain other activities.
The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the Credit Agreement and the sixth amended and restated pledge and security agreement (as applicable).
Item 9.01 |
Exhibits |
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Seventh Amended and Restated Credit Agreement dated September 27, 2024 |
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Seventh Amended and Restated Pledge and Security Agreement dated September 27, 2024 |
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104 |
Cover Page Interactive Data File (embedded within the inline XBRL document). |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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STAR GROUP, L.P. |
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By: Kestrel Heat, LLC (General Partner) |
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By: |
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/s/ Richard Ambury |
Name: |
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Richard Ambury |
Title: |
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Chief Financial Officer |
Date: October 1, 2024