Business Context and Reporting Period
Company: NGL Energy Partners LP
Filing Type: Form 8-K (Current Report)
Date of Report: August 25, 2011
Event Date: August 22, 2011
Context: The Partnership entered into a Sixth Amendment to its Credit Agreement and a Second Amendment to its Pledge and Security Agreement with Wells Fargo Bank, National Association, and other lenders.
Key Financial Metrics and Debt Structure
This filing details changes to the Partnership's credit facilities rather than reporting operational financial results (revenue, profit, or cash flow) for a specific period.
| Metric | Previous Value | New Value |
|---|---|---|
| Total Borrowing Capacity | $200 million | $330 million |
| Working Capital Facility Capacity | $100 million (implied) | $130 million |
| Acquisition Facility Capacity | $150 million (implied) | $200 million |
| Credit Agreement Maturity | October 14, 2014 | October 1, 2016 |
| Quarterly Commitment Fee | 0.50% | 0.375% (if leverage ratio ≤ 3.00:1.00) |
| Interest Rate on Borrowings | Base Rate | Base Rate - 0.25% |
Note: A $30 million portion of the working capital facility designated for seasonal needs terminates in February 2012.
Material Changes Versus Prior Period
- Capacity Increase: Total borrowing capacity increased by $130 million ($80 million to working capital; $50 million to acquisition facility).
- Maturity Extension: The maturity date of the Credit Agreement was extended by approximately two years.
- Cost Reduction: The amendment reduces the quarterly commitment fee and lowers the interest rate on outstanding borrowings by 0.25% per annum.
Guidance, Outlook, and Risks
Management Commentary: The filing references a press release issued on August 23, 2011, announcing the amendment. The full text of the Sixth Amendment is not included in this report but will be filed as an exhibit to the next quarterly report on Form 10-Q.
Risks and Contingencies: The filing does not explicitly list new risks or contingencies beyond the standard terms of the credit agreement. The reduction in fees is contingent upon the Partnership maintaining a leverage ratio of 3.00 to 1.00 or less.
Key Facts for Investor Verification
- Verify the full text of the Sixth Amendment to Credit Agreement in the upcoming Form 10-Q filing.
- Confirm the current leverage ratio to determine if the reduced commitment fee of 0.375% is applicable.
- Monitor the utilization of the new $130 million total capacity increase for working capital and acquisitions.
- Note the specific termination date (February 2012) for the $30 million seasonal credit portion.