Item 1.01 Entry into a Material Definitive Agreement.
On August 2, 2021, DCP Midstream, LP (the “Partnership”) and DCP Receivables LLC, a bankruptcy-remote special purpose entity that is an indirect wholly-owned subsidiary of the Partnership (the “SPV”), entered into that certain Fourth Amendment to Receivables Financing Agreement (the “Fourth Amendment”) among the SPV, as borrower, the Partnership, as initial servicer (the “Servicer”), the lenders, the LC bank, the LC participants, and the group agents that are parties thereto from time to time (collectively, the “Lenders”), and PNC Bank, National Association, as administrative agent (the “Administrative Agent” and collectively with the Lenders, the “Secured Parties”), and PNC Capital Markets LLC, as structuring agent.
The previously disclosed Receivables Financing Agreement, dated August 13, 2018, among the SPV, the Servicer and the Secured Parties (as so amended by the First Amendment thereto, dated as of August 12, 2019, the Second Amendment thereto, dated as of December 23, 2019, the Third Amendment thereto, dated as of April 22, 2021, and the Fourth Amendment, the “Receivables Financing Agreement”) and the previously disclosed Receivables Sale and Contribution Agreement, dated August 13, 2018, between the originators from time to time party thereto (the “Originators”) and the SPV (the “Receivables Sale and Contribution Agreement”) provide the terms and conditions for the $350 million accounts receivable securitization facility (the “Securitization Facility”).
The Fourth Amendment amends the Receivables Financing Agreement to, among other things, (a) extend the Scheduled Termination Date (as defined in the Receivables Financing Agreement) of the Securitization Facility to August 12, 2024 and, (b) beginning in 2022, implement a sustainability adjustment (the “ESG Margin”) to certain fees payable by the SPV for availability and use of the Securitization Facility that may result in a positive or negative adjustment of up to 0.025% on each such fee. The ESG Margin will be calculated based on the Partnership’s performance under two metrics: (i) relative change in greenhouse gas emissions of the Partnership and its subsidiaries and (ii) the Partnership’s total recordable incident rate compared to its peers.
Affiliates of certain of the lenders under the Receivables Financing Agreement have provided from time to time, and may provide in the future, investment and commercial banking and financial advisory services to the Partnership and its affiliates in the ordinary course of business, for which they have received, and may continue to receive, customary fees and commissions.
The foregoing descriptions of the Receivables Financing Agreement and the Receivables Sale and Contribution Agreement are not complete and are qualified in their entirety by reference to the full and complete terms of such agreements, which are filed as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5 and 10.6 hereto, respectively, and incorporated herein by reference.