| Item 1.01 | Entry into a Material Definitive Agreement. |
On January 14, 2025, Calumet, Inc. (the “Company”), Calumet Specialty Products Partners, L.P. (the “Partnership”), Calumet Finance Corp. (“Finance Corp.” and, together with the Partnership, the “Issuers”), Calumet GP, LLC (the “General Partner”) and certain subsidiary guarantors named therein (the “Subsidiary Guarantors”) entered into a purchase agreement (the “Purchase Agreement”) with BofA Securities, Inc. as representative of the several initial purchasers named therein (collectively, the “Initial Purchasers”), under which they agreed to sell $100 million aggregate principal amount of the Issuers’ 9.75% Senior Notes due 2028 (the “New Notes”) in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. The New Notes will mature on July 15, 2028 and will be issued at 98% of par for net proceeds of approximately $96.2 million, after deducting the Initial Purchasers’ discount and estimated offering expenses. The closing of the issuance of the New Notes is expected to occur on January 16, 2025, subject to customary closing conditions. The Company intends to use the net proceeds from the offering of the New Notes to redeem a portion of the Issuers’ outstanding 11.00% Senior Notes due 2026 (the “2026 Notes”) on or before April 15, 2025. Pending the application of the net proceeds, the Company may invest the proceeds in short-term, interest bearing instruments and other investment-grade securities or temporarily reduce borrowings under its revolving credit facility. The New Notes are a mirror issue to the Issuers’ existing 9.75% Senior Notes due 2028, of which $325 million in aggregate principal amount was issued on June 27, 2023 (the “Original Notes”). The New Notes will have substantially identical terms as the Original Notes. However, the New Notes will be issued under a separate indenture and have different CUSIP numbers from the Original Notes.
Certain of the Initial Purchasers and their affiliates have engaged in, are engaged in and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with the Company or its affiliates. The Initial Purchasers have received, or may in the future receive, customary fees and commissions for these transactions. Bank of America, N.A., an affiliate of one of the Initial Purchasers, is the administrative agent under the Issuers’ revolving credit facility. Additionally, certain of the Initial Purchasers or their affiliates may hold 2026 Notes and are lenders under the Issuers’ revolving credit facility and, therefore, may receive a portion of the net proceeds from the offering of the New Notes. The Company has also entered into, in the ordinary course of business, various derivative financial instrument transactions related to its crude oil and natural gas purchases and sales of finished fuel products, including diesel and gasoline crack spread hedges, with certain affiliates of certain of the Initial Purchasers.
The Purchase Agreement contains customary representations, warranties and agreements of the Company, the Issuers, the General Partner and the Subsidiary Guarantors and customary conditions to closing, indemnification rights, obligations of the parties and termination provisions.
The foregoing description of the Purchase Agreement is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which is filed as Exhibit 1.1 to this report and is incorporated herein by reference.
On January 14, 2025, the Company issued a press release announcing the pricing of the New Notes described in Item 1.01 of this report, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference.
