| Item 1.01 | Entry into a Material Definitive Agreement. |
On June 27, 2023, Calumet Specialty Products Partners, L.P. (the “Partnership”) and Calumet Finance Corp. (“Finance Corp.” and, together with the Partnership, the “Issuers”) issued $325.0 million aggregate principal amount of a new series of the Issuers’ 9.75% Senior Notes due 2028 (the “Notes”) in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). The Notes were issued at par for net proceeds of approximately $319.1 million, after deducting the initial purchasers’ discount and estimated offering expenses. The Partnership has used, or intends to use, a portion of the net proceeds from the offering of the Notes to fund offers (collectively, the “Tender Offers”) to purchase (i) any and all of its outstanding $200.0 million in aggregate principal amount of 9.25% Senior Secured First Lien Notes due 2024 (“2024 Secured Notes”) and (ii) up to $100.0 million in aggregate principal amount of its outstanding 11.00% Senior Notes due 2025 (“2025 Notes”) and pay related premiums and expenses, with the remaining net proceeds to be used for general partnership purposes, including debt repayment.
On June 28, 2023, in connection with the early settlement of the Tender Offers, the Partnership used approximately $125.5 million (excluding accrued and unpaid interest and related expenses) of the proceeds from the offering of the Notes to fund the repurchase of (i) approximately $21.0 million in aggregate principal amount of 2024 Secured Notes and (ii) $100.0 million in aggregate principal amount of 2025 Notes and pay related premiums. The Partnership intends to redeem, at some point after July 15, 2023, any amount of 2024 Secured Notes that remain outstanding after the expiration of the Tender Offer for the 2024 Secured Notes, at par, plus accrued and unpaid interest to, but not including, the redemption date. This Current Report on Form 8-K does not constitute a notice of redemption for the 2024 Secured Notes, and any redemption of 2024 Secured Notes that remain outstanding following the expiration of the Tender Offers will be made only pursuant to the terms of the applicable notice of redemption delivered pursuant to the terms of the indenture governing the 2024 Secured Notes.
The Notes are governed by an Indenture, dated as of June 27, 2023 (the “Indenture”), entered into by the Issuers and certain subsidiary guarantors named therein (the “Guarantors”) with Wilmington Trust, National Association, as trustee (the “Trustee”). The Notes will mature on July 15, 2028. Interest on the Notes is payable semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2024. The Notes are guaranteed on a senior unsecured basis by all of the Partnership’s existing subsidiaries (other than Finance Corp., the Partnership’s unrestricted subsidiaries, Montana Renewables Holdings LLC and Montana Renewables, LLC, and certain immaterial restricted subsidiaries).
On and after July 15, 2025, the Issuers may on any one or more occasions redeem all or part of the Notes at the redemption prices (expressed as percentages of principal amount) set forth below, plus any accrued and unpaid interest to the applicable redemption date on such Notes, if redeemed during the twelve-month period beginning on July 15 of the years indicated below:
| | | | |
Year | | Percentage | |
2025 | | | 104.875 | % |
2026 | | | 102.438 | % |
2027 and thereafter | | | 100.000 | % |
At any time prior to July 15, 2025, the Issuers may on any one or more occasions redeem up to 35% of the aggregate principal amount of the Notes issued under the Indenture in an amount not greater than the net cash proceeds from certain public equity offerings at a redemption price of 109.750% of the principal amount of the Notes, plus any accrued and unpaid interest to the date of redemption, provided that: (1) at least 60% of the aggregate principal amount of the Notes issued under the Indenture remains outstanding immediately after the occurrence of each such redemption (excluding notes held by the Partnership and its subsidiaries); and (2) the redemption occurs within 180 days of the date of the closing of such public equity offering.
Prior to July 15, 2025, the Issuers may on any one or more occasions redeem all or part of the Notes at a redemption price equal to the sum of: (1) the principal amount thereof, plus (2) the Make Whole Premium, as defined in the Indenture, at the redemption date, plus any accrued and unpaid interest to the applicable redemption date.
The Indenture contains covenants that, among other things, restrict the Partnership’s ability and the ability of certain of its subsidiaries to: (i) incur, assume or guarantee additional indebtedness or issue preferred units; (ii) create liens to secure indebtedness; (iii) pay dividends on equity securities, repurchase equity securities or redeem
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