| Item 1.01 | Entry into a Material Definitive Agreement. |
Amended and Restated Revolving Credit Facility
On July 30, 2018, PBF Logistics LP (the “Partnership”), an indirect subsidiary of PBF Energy Inc. (“PBF Energy”) and direct subsidiary of PBF Energy Company LLC (“PBF LLC”), entered into a $500.0 million amended and restated revolving credit facility (the “A&R Revolving Credit Facility”) with Wells Fargo Bank, National Association, as administrative agent, and a syndicate of lenders. The A&R Revolving Credit Facility amends and restates the Partnership’s five-year $360.0 million revolving credit facility entered into on May 14, 2014.
The A&R Revolving Credit Facility is available to fund working capital, acquisitions, distributions and capital expenditures and for other general partnership purposes. The Partnership has the ability to increase the maximum amount of the A&R Revolving Credit Facility by an aggregate amount of up to $250.0 million, to a total facility size of $750.0 million, subject to receiving increased commitments from lenders or other financial institutions and satisfaction of certain conditions. The A&R Revolving Credit Facility includes a $75.0 million sublimit for standby letters of credit and a $25.0 million sublimit for swingline loans. Obligations under the A&R Revolving Credit Facility are guaranteed by its restricted subsidiaries, and are secured by a first priority lien on the Partnership’s assets and those of the Partnership’s restricted subsidiaries. The maturity date of the A&R Revolving Credit Facility is July 30, 2023, but may be extended for one year on up to two occasions, subject to certain customary terms and conditions. Borrowings under the A&R Revolving Credit Facility will bear interest either at Base Rate (as defined in the A&R Revolving Credit Facility) plus an applicable margin ranging from 0.75% to 1.75%, or at LIBOR plus an applicable margin ranging from 1.75% to 2.75%. The applicable margin will vary based upon the Partnership’s Consolidated Total Leverage Ratio, as defined in the A&R Revolving Credit Facility.
The agreement governing the A&R Revolving Credit Facility (the “Amended and Restated Revolving Credit Agreement”) contains affirmative and negative covenants customary for revolving credit facilities of this nature which, among other things, limit or restrict the Partnership’s ability and the ability of its restricted subsidiaries to incur or guarantee debt, incur liens, make investments, make restricted payments, amend material contracts, engage in certain business activities, engage in mergers, consolidations and other organizational changes, sell, transfer or otherwise dispose of assets, enter into burdensome agreements, or enter into transactions with affiliates on terms which are not arm’s length.
Additionally, commencing with the Measurement Period (as defined in the Amended and Restated Revolving Credit Agreement) ending September 30, 2018, the Partnership will be required to maintain the following financial ratios, each as defined in the A&R Revolving Credit Agreement: (a) Consolidated Interest Coverage of at least 2.50 to 1.00, (b) Consolidated Total Leverage of not greater than 4.50 to 1.00 and (c) Consolidated Senior Secured Leverage of not greater than 3.50 to 1.00.
The agreement contains events of default customary for transactions of their nature, including, but not limited to (and subject to grace periods in certain circumstances), the failure to pay any principal, interest or fees when due, failure to perform or observe any covenant contained in the A&R Revolving Credit Facility or related documentation, any representation or warranty made in the agreements or related documentation being untrue in any material respect when made, default under certain material debt agreements, commencement of bankruptcy or other insolvency proceedings, certain changes in the Partnership’s ownership or the ownership or board composition of the General Partner and material judgments or orders. Upon the occurrence and during the continuation of an event of default under the agreements, the lenders may, among other things, terminate their commitments, declare any outstanding loans to be immediately due and payable and/or exercise remedies against the Partnership and the collateral as may be available to the lenders under the agreements and related documentation or applicable law.
The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Amended and Restated Revolving Credit Agreement, which is filed as Exhibit 10.1 to this Current Report on Form8-K and incorporated in this Item 1.01 by reference.
A&R Guaranty of A&R Revolving Credit Facility
On July 30, 2018, in connection with the A&R Revolving Credit Facility, PBF LLC entered into an Amended and Restated Guaranty and Collateral Agreement (the “A&R Guaranty”) in favor of Wells Fargo Bank, National Association, as administrative agent, for the benefit of the lenders under the A&R Revolving Credit Facility. Pursuant to the A&R Guaranty, PBF LLC guarantees the obligations outstanding under the A&R Revolving Credit Facility. PBF LLC is not required to make payments under the A&R Guaranty unless and until (a) the Partnership has failed to make a payment on the A&R Revolving Credit Facility obligations, (b) the obligations under the A&R Revolving Credit Facility have been accelerated and commitments terminated, (c) all remedies of the applicable agent and lenders to collect the unpaid amounts due under the A&R Revolving Credit Facility, whether at law or equity, have been exhausted and (d) the applicable agent and lenders have failed to collect the full amount owing on the A&R Revolving Credit Facility.
