USA Compression Partners, LP - Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed on December 17, 2013, regarding events occurring on December 13, 2013. USA Compression Partners, LP entered into a Fifth Amended and Restated Credit Agreement to restructure its existing debt facilities.
Key Financial Metrics and Debt Structure
- Outstanding Borrowings: Approximately $415.8 million as of December 12, 2013.
- Letters of Credit: No outstanding letters of credit as of December 12, 2013.
- Revolving Credit Facility Capacity: Increased from $600.0 million to $850.0 million (subject to borrowing base availability).
- Future Capacity: Agreement permits up to $100.0 million in future increases to borrowing capacity.
- Interest Margin: Eurodollar borrowing margins reduced to a range of 1.50% to 2.25%, dependent on the leverage ratio.
Material Changes Versus Prior Period
The new agreement amends and restates the Fourth Amended and Restated Credit Agreement dated June 1, 2012. Key modifications include:
- Maturity Extension: Termination and maturity dates extended from October 5, 2015, to December 13, 2018.
- Covenant Adjustment: Leverage ratio covenant modified to 5.5 to 1.0 through the fiscal quarter ending June 30, 2015, and 5.0 to 1.0 thereafter.
- Cost Reduction: Applicable interest margins were reduced compared to the prior facility.
Management Commentary, Risks, and Unusual Items
The company paid upfront fees, amendment fees, and arrangement fees in connection with entering the new agreement. The filing notes that amounts borrowed and repaid under the facility may be re-borrowed. The description of the agreement is qualified in its entirety by the full text of the Fifth Amended and Restated Credit Agreement filed as Exhibit 10.1. This filing does not provide specific revenue, profit, or cash flow metrics for the reporting period.
Investor Verification Checklist
- Verify the specific borrowing base limitations that cap the $850.0 million facility.
- Review the full text of Exhibit 10.1 for detailed fee structures and prepayment penalties.
- Confirm the company's current leverage ratio to determine the applicable interest margin within the 1.50% to 2.25% range.
- Assess the impact of the extended maturity date on long-term liquidity planning.