DEBT | 3 Months Ended |
Mar. 31, 2015 |
Debt Disclosure [Abstract] | |
DEBT | DEBT |
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Long-term debt as of March 31, 2015 and December 31, 2014 consists of the following: |
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($ in millions) | March 31, | | December 31, |
2015 | 2014 |
Variable Rate Demand Revenue Bonds, principal due October 1, 2018, interest payable monthly, bearing monthly interest rate of 0.12% at March 31, 2015 and 0.14% December 31, 2014 | $ | 11.4 | | | $ | 11.4 | |
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Variable Rate Demand Revenue Bonds, principal due August 1, 2017, interest payable monthly, bearing monthly interest rate of 0.12% at March 31, 2015 and 0.14% December 31, 2014 | 8.6 | | | 8.6 | |
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OCI Wyoming Credit Facility, unsecured principal expiring on July 18, 2018, interest payable quarterly, bearing quarterly variable interest at 2.00% at March 31, 2015 and 1.9781% at December 31, 2014 | 125 | | | 125 | |
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Total debt | $ | 145 | | | $ | 145 | |
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Current portion of long-term debt | — | | | — | |
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Total long-term debt | $ | 145 | | | $ | 145 | |
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Aggregate maturities required on long-term debt at March 31, 2015 are due in future years as follows: |
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($ in millions) | Amount | | | | |
2017 | $ | 8.6 | | | | | |
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2018 | 136.4 | | | | | |
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Total | $ | 145 | | | | | |
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Demand Revenue Bonds |
The above revenue bonds require OCI Wyoming to maintain standby letters of credit totaling $20.3 million at March 31, 2015 and December 31, 2014, respectively. These letters of credit require compliance with certain covenants, including minimum net worth, maximum debt to net worth, and interest coverage ratios. As of March 31, 2015 and December 31, 2014, OCI Wyoming was in compliance with these debt covenants. |
OCI Wyoming Credit Facility |
On July 18, 2013, OCI Wyoming entered into a $190.0 million senior unsecured revolving credit facility, as amended on October 30, 2014 (as amended, the "OCI Wyoming Credit Facility"), with a syndicate of lenders, which will mature on the fifth anniversary of the closing date of such credit facility. The OCI Wyoming Credit Facility provides for revolving loans to fund working capital requirements, capital expenditures, to consummate permitted acquisitions and for all other lawful partnership purposes. The OCI Wyoming Credit Facility has an accordion feature that allows OCI Wyoming to increase the available revolving borrowings under the facility by up to an additional $75.0 million, subject to OCI Wyoming receiving increased commitments from existing lenders or new commitments from new lenders and the satisfaction of certain other conditions. In addition, the OCI Wyoming Credit Facility includes a sublimit up to $20.0 million for same-day swing line advances and a sublimit up to $40.0 million for letters of credit. OCI Wyoming's obligations under the OCI Wyoming Credit Facility are unsecured. |
The OCI Wyoming Credit Facility contains various covenants and restrictive provisions that limit (subject to certain exceptions) OCI Wyoming's ability to: |
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• | make distributions on or redeem or repurchase units; | | | | | | |
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• | incur or guarantee additional debt; | | | | | | |
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• | make certain investments and acquisitions; | | | | | | |
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• | incur certain liens or permit them to exist; | | | | | | |
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• | enter into certain types of transactions with affiliates of OCI Wyoming; | | | | | | |
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• | merge or consolidate with another company; and | | | | | | |
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• | transfer, sell or otherwise dispose of assets. | | | | | | |
The OCI Wyoming Credit Facility also requires quarterly maintenance of a consolidated leverage ratio (as defined in the OCI Wyoming Credit Facility) of not more than 3.00 to 1.00 and a consolidated fixed charge coverage ratio (as defined in the OCI Wyoming Credit Facility) of not less than 1.10 to 1.00 for the 2015 fiscal year and not less than 1.15 to 1.00 thereafter. The OCI Wyoming Credit Facility also requires that consolidated capital expenditures, as defined in the OCI Wyoming Credit Facility, not exceed $50 million in any fiscal year. |
In addition, the OCI Wyoming Credit Facility contains events of default customary for transactions of this nature, including (i) failure to make payments required under the OCI Wyoming Credit Facility, (ii) events of default resulting from failure to comply with covenants and financial ratios in the OCI Wyoming Credit Facility, (iii) the occurrence of a change of control, (iv) the institution of insolvency or similar proceedings against OCI Wyoming and (v) the occurrence of a default under any other material indebtedness OCI Wyoming may have. Upon the occurrence and during the continuation of an event of default, subject to the terms and conditions of the OCI Wyoming Credit Facility, the lenders may terminate all outstanding commitments under the OCI Wyoming Credit Facility and may declare any outstanding principal of the OCI Wyoming Credit Facility debt, together with accrued and unpaid interest, to be immediately due and payable. |
Under the OCI Wyoming Credit Facility, a change of control is triggered if OCI Chemical and its wholly-owned subsidiaries, directly or indirectly, cease to own all of the equity interests, or cease to have the ability to elect a majority of the board of directors (or similar governing body) of OCI GP (or any entity that performs the functions of our general partner). In addition, a change of control would be triggered if we cease to own at least 50.1% of the economic interests in OCI Wyoming or cease to have the ability to elect a majority of the members of OCI Wyoming's board of managers. |
OCI Wyoming was in compliance with all covenants and restrictions under its long-term debt agreements as of March 31, 2015. |
Loans under the OCI Wyoming Credit Facility bear interest at OCI Wyoming's option at either: |
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• | a Base Rate, which equals the highest of (i) the federal funds rate in effect on such day plus 0.50%, (ii) the administrative agent's prime rate in effect on such day and (iii) one-month LIBOR plus 1.0%, in each case, plus an applicable margin; or | | | | | | |
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• | a LIBOR Rate plus an applicable margin. | | | | | | |
The unused portion of the OCI Wyoming Credit Facility is subject to an unused line fee ranging from 0.275% to 0.350% per annum based on OCI Wyoming's then current consolidated leverage ratio. |
Revolving Credit Facility |
On July 18, 2013, we entered into a $10.0 million senior secured revolving credit facility, as amended on October 30, 2014 (as amended, the "Revolving Credit Facility"), with a syndicate of lenders, which will mature on the fifth anniversary of the closing date of such credit facility. The Revolving Credit Facility provides for revolving loans to be available to fund distributions on OCIR's units and working capital requirements and capital expenditures, to consummate permitted acquisitions and for all other lawful partnership purposes. At March 31, 2015, we had no outstanding borrowings under the Revolving Credit Facility. The Revolving Credit Facility includes a sublimit up to $5.0 million for same-day swing line advances and a sublimit up to $5.0 million for letters of credit. Our obligations under the Revolving Credit Facility are guaranteed by each of our material domestic subsidiaries other than OCI Wyoming, and to the extent no material adverse tax consequences would result, foreign wholly-owned subsidiaries. As of March 31, 2015, our only subsidiary was OCI Wyoming. In addition, our obligations under the Revolving Credit Facility are secured by a pledge of substantially all of our assets (subject to certain exceptions), including the partnership interests held in OCI Wyoming by us. |
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The Revolving Credit Facility contains various covenants and restrictive provisions that limit (subject to certain exceptions) our ability to (and the ability of our subsidiaries, including without limitation, OCI Wyoming to): |
| | | | | | | |
• | make distributions on or redeem or repurchase units; | | | | | | |
| | | | | | | |
• | incur or guarantee additional debt; | | | | | | |
| | | | | | | |
• | make certain investments and acquisitions; | | | | | | |
| | | | | | | |
• | incur certain liens or permit them to exist; | | | | | | |
| | | | | | | |
• | enter into certain types of transactions with affiliates; | | | | | | |
| | | | | | | |
• | merge or consolidate with another company; and | | | | | | |
| | | | | | | |
• | transfer, sell or otherwise dispose of assets. | | | | | | |
The Revolving Credit Facility also requires quarterly maintenance of a consolidated fixed charge coverage ratio (as defined in the Revolving Credit Facility) of not less than 1.05 to 1.00 for the 2015 fiscal year and not less than 1.10 to 1.00 thereafter. The Revolving Credit Facility also requires that consolidated capital expenditures, as defined in the Revolving Credit Facility, not exceed $50 million in any fiscal year. |
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In addition, the Revolving Credit Facility contains events of default customary for transactions of this nature, including (i) failure to make payments required under the Revolving Credit Facility, (ii) events of default resulting from failure to comply with covenants and financial ratios, (iii) the occurrence of a change of control, (iv) the institution of insolvency or similar proceedings against us or our material subsidiaries and (v) the occurrence of a default under any other material indebtedness we (or any of our subsidiaries) may have, including the OCI Wyoming Credit Facility. Upon the occurrence and during the continuation of an event of default, subject to the terms and conditions of the Revolving Credit Facility, the lenders may terminate all outstanding commitments under the Revolving Credit Facility and may declare any outstanding principal of the Revolving Credit Facility debt, together with accrued and unpaid interest, to be immediately due and payable. |
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Under the Revolving Credit Facility, a change of control is triggered if OCI Chemical and its wholly-owned subsidiaries, directly or indirectly, cease to own all of the equity interests, or cease to have the ability to elect a majority of the board of directors (or similar governing body) of, OCI Holdings or OCI GP (or any entity that performs the functions of our general partner). In addition, a change of control would be triggered if we cease to own at least 50.1% of the economic interests in OCI Wyoming or ceases to have the ability to elect a majority of the members of OCI Wyoming's board of managers. |
The Partnership was in compliance with all covenants and restrictions under its long-term debt agreements as of March 31, 2015. |
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Loans under the Revolving Credit Facility bear interest at our option at either: |
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• | a Base Rate, which equals the highest of (i) the federal funds rate in effect on such day plus 0.50%, (ii) the administrative agent's prime rate in effect on such day and (iii) one-month LIBOR plus 1.0%, in each case, plus an applicable margin; or | | | | | | |
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• | a LIBOR Rate plus an applicable margin. | | | | | | |
The unused portion of the Revolving Credit Facility is subject to an unused line fee ranging from 0.275% to 0.350% based on our then current consolidated leverage ratio. |