Item 1.01. Entry into a Material Definitive Agreement.
On August 1, 2019, UGI Corporation, a Pennsylvania corporation (“UGI”), entered into that certain Credit Agreement (the “Credit Agreement”) by and among UGI, JPMorgan Chase Bank, N.A., as administrative agent, Citizens Bank, N.A., Credit Suisse AG, Cayman Islands Branch, PNC Bank, National Association and Wells Fargo Bank, National Association, asco-documentation agents, and the other financial institutions from time to time party thereto (collectively, the “Lenders”).
Under and subject to the terms and conditions of the Credit Agreement, the Lenders have committed to provide to UGI senior, unsecured term loans in an aggregate principal amount of up to $550 million, available in two tranches of $250 million (the “TermA-1 Loans”) and $300 million (the “TermA-2 Loans”), and senior, unsecured revolving credit loans in an aggregate principal amount of up to $300 million (the “Revolving Loans”), including a letter of credit subfacility of up to $10 million. UGI may use the proceeds of loans made under the Credit Agreement to finance the transactions described in Item 2.01 below, the acquisition of all of the publicly held common units representing limited partnership interests in AmeriGas Partners, L.P. (the “Partnership”) pursuant to the previously announced pending merger of an indirect, wholly owned subsidiary of UGI with and into the Partnership, certain other transactions and for general corporate purposes of UGI and its subsidiaries in the ordinary course of business.
ABR Loans (as defined in the Credit Agreement) will bear interest at a rate equal to the sum of (1) the highest of (a) the federal funds open rate plus 0.50%, (b) the prime rate, or (c) the daily LIBOR rate plus 1.0%, and (2) the Applicable Rate (as defined in the Credit Agreement), each as in effect on the date of the borrowing. The Applicable Rate will be based on the leverage of UGI or credit ratings assigned to certain indebtedness of UGI. Eurodollar Loans (as defined in the Credit Agreement) will bear interest at a rate equal to the sum of (1) the London interbank offered rates times the Statutory Reserve Rate (as defined in the Credit Agreement), and (2) the Applicable Rate.
In connection with the letters of credit, UGI will pay (1) a quarterly participation fee equal to the Applicable Rate for Eurodollar Revolving Loans (as defined in the Credit Agreement) in effect on such date, and (2) a quarterly fronting fee equal to 0.175% of the amount of letter of credit exposure, plus administrative expenses.
The Revolving Loans have a maturity date of the fifth anniversary of the effective date of the Revolving Loans. The TermA-1 Loans have a maturity date of the fifth anniversary of the effective date of the TermA-1 Loans. The TermA-2 Loans have a maturity date of the third anniversary of the effective date of the TermA-2 Loans. UGI may voluntarily prepay its borrowings under the Credit Agreement, in whole or in part, without any premium or penalty.
The Credit Agreement contains customary representations and warranties and affirmative and negative covenants for agreements of this type, including, among others, covenants regarding the maintenance of a financial ratio, covenants relating to financial reporting, compliance with laws and material contractual obligations, payment of obligations including tax liabilities, preservation of existence, books and records and inspection rights, maintenance of properties and insurance, limitations on indebtedness and liens, restrictions on mergers and restrictions on sales of assets, and limitations on investments, restricted payments and transactions with affiliates.
The Credit Agreement provides for customary events of default, including, among other things, in the event of nonpayment of principal, interest, fees or other amounts, a representation or warranty proving to have been incorrect in any material respect when made, failure to perform or observe covenants within a specified period of time, a cross-default to other indebtedness of a specified amount, the bankruptcy or insolvency of UGI or any of its subsidiaries, monetary judgment defaults of a specified amount, change of control, and ERISA defaults resulting in a material adverse effect. In the event of a default by UGI, the administrative agent may, and at the request of the requisite number of Lenders shall, declare all amounts owed under the Credit Agreement immediately due and payable and terminate the Lenders’ commitments to make loans under the Credit Agreement. For defaults related to insolvency and receivership, the commitments of the Lenders will be automatically terminated and all outstanding loans and other amounts will become immediately due and payable. Under the terms of the Credit Agreement, a 2% interest penalty may apply to any outstanding amount not paid when due or that remains outstanding while an event of default exists.
The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the Credit Agreement, which is filed as Exhibit 10.1 to this Current Report onForm 8-K and is incorporated herein by reference.
Item 2.01. Completion of Purchase or Sale.
On August 1, 2019, UGI Energy Services, LLC, a Pennsylvania limited liability company (“UGIES”), a wholly owned subsidiary of UGI, completed the acquisition of 100% of the outstanding membership interests in Columbia Midstream Group, LLC, a
