Item 1.01. Entry into a Material Definitive Agreement.
On July 14, 2022, Hess Midstream LP (the “Company”) and its subsidiary, Hess Midstream Operations LP (the “Partnership”) amended and restated the existing credit agreement dated as of December 16, 2019 (the “Existing Credit Agreement”), among the Company, the Partnership, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (as amended and restated, the “Restated Credit Agreement”). The Restated Credit Agreement continues to provide for commitments of up to $1 billion in aggregate amount by the lenders thereunder under the senior secured revolving credit facility and $400 million in aggregate amount by the lenders thereunder under the senior secured term loan facility.
The Restated Credit Agreement (i) extends the maturity date under the Existing Credit Agreement from December 16, 2024 to July 14, 2027, unless earlier terminated or extended in accordance with its terms, (ii) increases the accordion feature to up to an additional $750 million under the Restated Credit Agreement, and (iii) amends the Existing Credit Agreement to replace the London Interbank Offered Rate, or LIBOR, with the Secured Overnight Financing Rate, or SOFR, as benchmark interest rate, among other changes as set forth in the Restated Credit Agreement.
The obligations of the Partnership under the Restated Credit Agreement continue to be guaranteed by each direct and indirect wholly owned material domestic subsidiary of the Partnership, and are secured by first priority perfected liens on substantially all of the presently owned and after-acquired assets of the Partnership and its direct and indirect wholly owned material domestic subsidiaries, including equity interests directly owned by such entities, subject to certain customary exclusions.
The Restated Credit Agreement also continues to contain representations and warranties, affirmative and negative covenants and events of default that the Partnership considers to be customary for an agreement of this type, including a covenant that requires the Partnership to maintain a ratio of total debt to EBITDA (as defined in the Restated Credit Agreement) for the prior four fiscal quarters of not greater than 5.00 to 1.00 as of the last day of each fiscal quarter (5.50 to 1.00 during the specified period following certain acquisitions) and, prior to the Partnership obtaining an investment grade credit rating, a ratio of secured debt to EBITDA for the prior four fiscal quarters of not greater than 4.00 to 1.00 as of the last day of each fiscal quarter.
Many of the lenders under the Restated Credit Agreement have in the past performed, and may in the future from time to time perform, investment banking, financial advisory, lending and/or commercial banking services or other services for the Company or its affiliates, and affiliates or certain of these lenders have served in the past as underwriters in public offerings of securities by the Company, for which they have received, and may in the future receive, customary compensation and expense reimbursement.
The foregoing description is qualified in its entirety by reference to the complete text of the Restated Credit Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated by reference herein.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
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