Business Context and Reporting Period
Company: Global Partners LP
Filing Type: Form 8-K (Current Report)
Date of Report: July 31, 2018
Event: Entry into a Material Definitive Agreement for a public offering of preferred units.
Key Financial Metrics
This filing details a capital raise rather than operational performance metrics. Key figures include:
- Security Issued: 2,400,000 9.75% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units.
- Offering Price: $25.00 per unit.
- Expected Net Proceeds: Approximately $57.8 million (or approximately $66.5 million if the underwriters' option is fully exercised).
- Use of Proceeds: To reduce indebtedness outstanding under the Partnership's credit agreement.
- Over-Allotment Option: Underwriters granted a 30-day option to purchase up to an additional 360,000 units.
Material Changes and Terms
The filing announces the execution of an Underwriting Agreement with Stifel, Nicolaus & Company, Incorporated, Morgan Stanley & Co. LLC, and UBS Securities LLC. The distribution terms for the Series A Preferred Units are structured as follows:
- Fixed Rate Period: From original issue until August 15, 2023, distributions are cumulative at a fixed rate of 9.75% per annum on the $25.00 liquidation preference.
- Floating Rate Period: On and after August 15, 2023, distributions will accumulate at an annual floating rate equal to three-month LIBOR plus a spread of 6.774%.
- Closing Date: Expected on August 7, 2018, subject to customary conditions.
Outlook, Risks, and Contingencies
Management Commentary: The Partnership intends to utilize the net proceeds to pay down existing debt under its credit agreement. The transaction is registered under a shelf registration statement (Form S-3) filed in January 2018.
Related Party Transactions: Certain underwriters and their affiliates have provided financial advisory and banking services to the Partnership. An affiliate of MUFG Securities Americas Inc. is a lender under the Partnership's credit agreement and may receive a portion of the net proceeds.
Risks: The closing is subject to customary conditions. The filing does not provide specific operational risks or guidance beyond the terms of the offering.
Investor Verification Checklist
- Verify the final closing date and whether the underwriters exercised the 360,000 unit over-allotment option.
- Confirm the actual net proceeds received after deducting underwriting discounts and expenses.
- Review the updated debt levels post-payment to assess the impact on the Partnership's leverage ratios.
- Examine the full text of the Underwriting Agreement (Exhibit 1.1) for specific covenants or termination provisions.