| Item 1.01. | Entry into a Material Definitive Agreement. |
Amended and Restated ABL Credit Agreement
On October 26, 2022 (the “Closing Date”), Delek US Holdings, Inc. (the “Company”) entered into (i) a third amended and restated credit agreement (the “Amended and Restated ABL Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent (the “Revolver Administrative Agent”), the Company, as borrower, certain subsidiaries of the Company as further described under “Guarantee and Security” below, as guarantors, and the other lenders party thereto, providing for a senior secured asset-based revolving credit facility with an initial commitment of $1.1 billion (the “Revolving Credit Facility”).
The Revolving Credit Facility permits borrowings in Canadian dollars of up to $50.0 million. The Revolving Credit Facility also permits the issuance of letters of credit of up to $500.0 million, including letters of credit denominated in Canadian dollars of up to $10.0 million. The Company may designate restricted subsidiaries as additional borrowers under the Revolving Credit Facility.
The interest rates applicable to borrowings under the Revolving Credit Facility are based on a fluctuating rate of interest measured by reference to either, at the Company’s option, (i) a base rate, plus an applicable margin, or (ii) a Adjusted Term Secured Overnight Financing Rate (“SOFR”), plus an applicable margin (or, in the case of Revolving Credit Facility borrowings denominated in Canadian dollars, the Canadian dollar bankers’ acceptances rate (“CDOR”)). The initial applicable margin for Revolving Credit Facility borrowings is 0.25% per annum with respect to base rate borrowings and 1.25% per annum with respect to SOFR and CDOR borrowings, and the applicable margin for such borrowings after December 31, 2022 will be based on the Company’s quarterly average excess availability as determined by reference to a borrowing base, ranging from 0.25% per annum to 0.75% per annum with respect to base rate borrowings and from 1.25% per annum to 1.75% per annum with respect to SOFR and CDOR borrowings.
In addition, the Revolving Credit Facility will require the Company to pay an unused line fee on the average amount of unused commitments thereunder in each quarter, which fee will be at a rate of 0.250% or 0.30%, depending on average commitment usage for such quarter.
The Revolving Credit Facility is required to be prepaid (i) to the extent extensions of credit thereunder exceed the lesser of the borrowing base and the aggregate commitments and (ii) 100% of the Company’s and its restricted subsidiaries’ net cash proceeds from the issuance or incurrence of debt obligations for borrowed money not permitted under the Amended and Restated ABL Credit Agreement. In addition, if excess availability as determined by reference to a borrowing base falls below a specified threshold or if certain events of default occur under the Revolving Credit Facility, all cash proceeds of collateral pledged under the Revolving Credit Facility will be applied to repay the Revolving Credit Facility or secure certain obligations thereunder, subject to the right to reborrow thereafter under the Revolving Credit Facility. The Borrowers may voluntarily repay and reborrow outstanding loans under the Revolving Credit Facility at any time without a premium or penalty, other than customary “breakage” costs with respect to SOFR or CDOR loans.
The Revolving Credit Facility will mature and the commitments thereunder will terminate five years after the Closing Date.
Pursuant to certain guaranty and security agreements, the obligations of the borrowers under the Amended and Restated ABL Credit Agreement are guaranteed by the Company and each of its direct and indirect, existing and future, wholly-owned domestic subsidiaries, subject to customary exceptions and limitations, and excluding Delek Logistics Partners, LP, a Delaware limited partnership (“Delek MLP”), and Delek Logistics GP, LLC, a Delaware limited liability company (“Delek MLP GP”), certain other publicly traded limited partnership affiliates of the Company that may be acquired in the future and each subsidiary of the foregoing (collectively, the “MLP Subsidiaries”). Borrowings under the Amended and Restated ABL Credit Agreement are also guaranteed by DK Canada Energy ULC, a British Columbia unlimited liability company and a wholly-owned restricted subsidiary of the Company.
