Business Context and Reporting Period
Company: Global Partners LP
Filing Type: Form 8-K (Current Report)
Date of Report: August 14, 2023
Reporting Period: Event date August 14, 2023 (Effective change August 15, 2023)
Business Context: Disclosure regarding the transition of the distribution rate for Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units.
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, or general liquidity metrics. It specifically addresses the terms of a preferred security:
- Security: Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units.
- Outstanding Units: 2,760,000 units issued in August 2018.
- Liquidation Preference: $25.00 per unit.
- Previous Rate (Pre-August 15, 2023): 9.75% per annum fixed rate.
- New Rate (Post-August 15, 2023): Floating rate based on 3-month CME Term SOFR plus a spread of 6.774% per annum.
Material Changes
The material change disclosed is the scheduled transition of the Series A Preferred Units from a fixed distribution rate to a floating rate mechanism effective August 15, 2023.
- Base Rate Change: The calculation agent selected the 3-month CME Term SOFR as the successor to the three-month LIBOR base rate.
- Spread Adjustment: The new floating rate includes an applicable tenor spread of 0.26161% per annum added to the CME Term SOFR, plus the fixed spread of 6.774% per annum.
Guidance, Outlook, and Risks
Management Commentary: The filing confirms the selection of the industry-accepted substitute base rate (3-month CME Term SOFR) for the floating rate calculation.
Risks and Contingencies: The filing notes that the information provided under Item 7.01 is not deemed "filed" for purposes of Section 18 of the Exchange Act unless specifically incorporated by reference, limiting liability exposure for this specific disclosure.
Unusual Items: None reported beyond the scheduled rate transition.
Investor Verification Checklist
- Verify the exact calculation of the new floating distribution rate for the first quarter following August 15, 2023, based on the 3-month CME Term SOFR.
- Confirm the total quarterly distribution obligation for the 2,760,000 Series A Preferred Units under the new floating rate structure.
- Review the impact of the floating rate transition on the company's overall cost of capital compared to the previous 9.75% fixed rate.
- Check subsequent filings for the actual distribution declaration dates and amounts for the Series A Preferred Units.