Business Context and Reporting Period
Company: GLOBAL PARTNERS LP
Filing Type: Form 8-K (Current Report)
Date of Report: January 25, 2013
Event: Entry into a Material Definitive Agreement and Creation of a Direct Financial Obligation via the Ninth Amendment to the Amended and Restated Credit Agreement.
Key Financial Metrics and Obligations
This filing details a new financing arrangement rather than reporting operational financial results (revenue, profit, or cash flow) for a specific period.
- New Term Loan: Up to $115.0 million.
- Term Loan Interest Rate: Eurodollar rate or cost of funds rate plus 3.50%, or base rate plus 2.50%.
- Term Loan Maturity: Expected January 31, 2014 (364 days after the effective date).
- Revolving Credit Facility Interest Rate (during Term Loan): Eurodollar rate or cost of funds rate plus 3.50%, or base rate plus 2.50%.
- Commitment Fee (Unused Revolver): 0.50% per annum.
- Administrative Agent: Bank of America, N.A.
Material Changes and Purpose of Financing
The Ninth Amendment was executed to facilitate two potential acquisitions:
- Basin Acquisition: Acquisition of a 60% membership interest in Basin Transload LLC.
- Proposed Target Acquisition: A proposed acquisition with a cash purchase price of approximately $98.0 million.
Covenant Modifications:
- Increased permitted Combined Senior Secured Leverage Ratio for each quarter in the year ending December 31, 2013.
- Increased permitted Combined Total Leverage Ratio for the quarters ending March 31, 2013, and June 30, 2013.
Conditions, Risks, and Outlook
Effective Date Conditions: The amendment becomes effective only upon the closing of the Basin Acquisition and/or the Target Acquisition, provided such closings occur on or before February 28, 2013, and other conditions are satisfied.
Termination Risk: If the effective date has not occurred by February 28, 2013, any lender commitment to provide the Term Loan automatically terminates, and no Term Loan shall be made.
Repayment Source: Proceeds from the issuance of equity or debt by Borrowers or Original Guarantors will be used to repay amounts outstanding under the Term Loan.
Financial Performance Data: The filing text does not provide a clear value for revenue, profit, cash flow, or existing debt levels; it references prior filings (10-Q for Q3 2012 and 8-Ks from Oct/Nov 2012) for existing credit agreement terms.
Investor Verification Checklist
- Verify the closing status of the Basin Acquisition and the Proposed Target Acquisition by the February 28, 2013 deadline.
- Confirm the actual drawdown amount of the $115.0 million Term Loan once the effective date is triggered.
- Review the impact of the increased leverage ratios on the company's compliance with covenants in subsequent quarters.
- Monitor the interest rate environment (Eurodollar/Base rate) to assess the cost of the new debt.
- Check subsequent filings for the actual purchase price and terms of the "Proposed Target Acquisition."