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Star Gas Partners subsidiary details amended credit facility
By Jennifer Chiou
New York, June 7 - Star Gas Partners, LP subsidiary Petroleum Heat and Power Co., Inc. released details on its amended and restated asset-based revolving credit facility via JPMorgan Chase Bank, NA as administrative agent and collateral agent in an 8-K filing with the Securities and Exchange Commission.
The company may borrow up to $250 million for working capital purposes, rising to $300 million during the heating season of December through April of each year. This includes the issue of up to $100 million of letters of credit. The capacity may be increased by $100 million.
The facility is guaranteed by Star Gas' and its subsidiaries' assets, including accounts receivable, inventory, general intangibles, real property, fixtures and equipment.
As of the June 3 closing date, no borrowings were outstanding and $46.7 million of letters of credit were outstanding under the amended facility.
The company must meet certain financial covenants under the amended loan, including the requirement to maintain at all times either excess availability of 12.5% of the revolving commitment or a fixed-charge coverage ratio of not less than 1.1 to 1.0.
In addition, excess availability has to amount to at least 17.5% of the revolving commitment with a fixed-charge coverage ratio of 1.15x in order to make any distributions to unitholders.
The term of the credit agreement was extended to June 2016 from July 2012, according to a prior company news release.
The syndicate included J.P. Morgan Securities LLC, Bank of America Merrill Lynch and RBS Citizens, NA as arrangers and bookrunners;, Key Bank NA, PNC Bank, NA, Regions Bank, TD Bank, NA and Wells Fargo Capital Finance, LLC as senior managing agents; and Bank of America, NA as the syndication agent. RBS Citizens is the documentation agent.
Star Gas is a retail distributor of home heating oil. It is based in Stamford, Conn.
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