Marathon Petroleum, MPLX enter three revolvers totaling $5.75 billion

By Wendy Van Sickle

Columbus, Ohio, July 27 – Marathon Petroleum Corp. entered into a $2.5 billion five-year revolving credit agreement and a $1 billion 364-day revolving credit agreement on July 21, and limited partnership MPLX LP entered into a $2.25 billion five-year revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

Marathon Petroleum revolvers

For each of the two new Marathon Petroleum credit facilities, JPMorgan Chase Bank, NA, Citigroup Global Markets Inc., Barclays Bank plc, Bank of America Merrill Lynch, Mizuho Bank, Ltd., MUFG, RBC Capital Markets and Wells Fargo Securities, LLC acted as joint lead arrangers and joint bookrunners; Wells Fargo as syndication agent; Bank of America, NA, Barclays, Citigroup, Mizuho, MUFG and RBC, as documentation agents; and JPMorgan as administrative agent.

The new five-year revolver replaced Marathon Petroleum’s $2.5 billion four-year revolver, dated July 20, 2016, which was terminated.

Pricing on the five-year revolver is initially Libor plus 125 basis points with a commitment fee of 15 bps. The margin above Libor can range from 100 bps to 175 bps and the commitment fee from 10 bps to 25 bps, depending on Marathon’s credit ratings.

The company has the option to increase the five-year revolver by up to an additional $500 million. The credit facility has a $100 million sublimit for swingline loans and a $1.8 billion sublimit for letters of credit.

The company has two one-year extension options.

The new 364-day revolver matures on July 20, 2018.

Pricing is initially Libor plus 125 bps with a commitment fee of 12.5 bps. The margin above Libor can range from 112.5 bps to 150 bps and the commitment fee from 10 bps to 17.5 bps, depending on Marathon’s credit ratings.

Each Marathon Petroleum credit agreement contains representations and warranties, affirmative and negative covenants and events, including a covenant that requires Marathon’s ratio of total net debt to total capitalization not to exceed 65% as of the last day of each fiscal quarter.

Proceeds of each of the new revolvers may be used for working capital and general corporate purposes.

MPLX $2.25 billion revolver

For this credit agreement, Wells Fargo Securities, LLC, JPMorgan Chase Bank, NA, Barclays Bank plc, Citigroup Global Markets Inc., Bank of America Merrill Lynch, Mizuho Bank, Ltd., MUFG and RBC Capital Markets acted as joint lead arrangers and joint bookrunners; JPMorgan Chase as syndication agent; Bank of America, NA, Barclays, Citigroup, Mizuho, MUFG and Royal Bank of Canada as co-documentation agents and Wells Fargo as administrative agent.

There is a $222 million sublimit for letters of credit and a $100 million sublimit for swingline loans.

The company has the option to increase the revolver by up to an additional $500 million and has two one-year extension options.

Pricing is initially Libor plus 150 bps with a commitment fee of 20 bps. The margin above Libor can range from 112.5 bps to 200 bps and the commitment fee from 12.5 bps to 30 bps, depending on Marathon’s credit ratings.

MPLX must maintain a maximum ratio of consolidated total debt to consolidated EBITDA of 5.0 to 1.0.

Proceeds may be used for working capital and general corporate purposes.

The new revolver replaced MPLX’s $2 billion revolving credit agreement, dated Nov. 20, 2014, which was terminated.

Marathon Petroleum is a crude oil refiner based in Findlay, Ohio.

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