Item 1.01 Entry into a Material Definitive Agreement.
364-Day Revolving Credit Agreement
On September 13, 2017, Enterprise Products Operating LLC, a Texas limited liability company (“EPO”) and the operating subsidiary of Enterprise Products Partners L.P., a Delaware limited partnership (the “Partnership”), entered into a 364-Day Revolving Credit Agreement among EPO, as Borrower, the Lenders party thereto, Citibank, N.A. as Administrative Agent, Wells Fargo Bank, National Association, DNB Bank ASA, New York Branch, JPMorgan Chase Bank, N.A., Mizuho Bank, Ltd. and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Co-Syndication Agents, and Barclays Bank PLC, Royal Bank of Canada, Sumitomo Mitsui Banking Corporation, SunTrust Bank, The Bank of Nova Scotia and The Toronto-Dominion Bank, New York Branch, as Co-Documentation Agents (the “364-Day Credit Agreement”). Under the terms of the 364-Day Credit Agreement, EPO may borrow up to $1.5 billion (which may be increased by up to $200 million to $1.7 billion at EPO’s election, provided certain conditions are met) at a variable interest rate for a term of 364 days, subject to the terms and conditions set forth therein.
The 364-Day Credit Agreement replaces EPO’s existing 364-Day Revolving Credit Agreement, dated as of September 30, 2014, among EPO, the Lenders party thereto, Citibank N.A., as Administrative Agent, and certain financial institutions from time to time named therein, as Co-Documentation Agents, as amended to date. EPO may use the proceeds from loans under the 364-Day Credit Agreement for working capital, capital expenditures, acquisitions and other company purposes.
EPO’s obligations under the 364-Day Credit Agreement are not secured by any collateral; however, they are guaranteed by the Partnership pursuant to a Guaranty Agreement (the “364-Day Guaranty Agreement”). Amounts borrowed under the 364-Day Credit Agreement mature on September 12, 2018, although EPO may, between 15 and 60 days prior to the maturity date, elect to have the entire principal balance then outstanding continued as non-revolving term loans for a period of one additional year, payable on September 12, 2019.
In addition to interest payments on outstanding borrowings, on a quarterly basis, EPO is required to pay a facility fee on each lender’s commitment irrespective of commitment usage. The facility fee amount and the applicable rate spread for Eurodollar loans and alternate base rate loans will vary based on EPO’s senior debt credit rating.
The 364-Day Credit Agreement contains customary representations, warranties, covenants (affirmative and negative) and events of default, the occurrence of which would permit the lenders to accelerate the maturity date of amounts borrowed under the 364-Day Credit Agreement. The 364-Day Credit Agreement also restricts EPO’s ability to pay cash distributions to the Partnership if an event of default (as defined in the 364-Day Credit Agreement) has occurred and is continuing at the time such distribution is scheduled to be paid or would result therefrom.
The descriptions of the 364-Day Credit Agreement and the 364-Day Guaranty Agreement in this Item 1.01 are qualified in their entirety by reference to the full text of the 364-Day Credit Agreement and the 364-Day Guaranty Agreement, which are filed as Exhibits 10.1 and 10.2 hereto, respectively, and incorporated herein by reference.
Multi-Year Revolving Credit Agreement
On September 13, 2017, EPO entered into a Revolving Credit Agreement among EPO, as Borrower, the Lenders party thereto, Wells Fargo Bank, National Association, as Administrative Agent, Citibank, N.A., DNB Bank ASA, New York Branch, JPMorgan Chase Bank, N.A., Mizuho Bank, Ltd. and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Co-Syndication Agents, and Barclays Bank PLC, Royal Bank of Canada, Sumitomo Mitsui Banking Corporation, SunTrust Bank, The Bank of Nova Scotia and The Toronto-Dominion Bank, New York Branch, as Co-Documentation Agents (the “Multi-Year Credit Agreement”). Under the terms of the Multi-Year Credit Agreement, EPO may borrow up to $4.0 billion (which may be increased by up to $500 million to $4.5 billion at EPO’s election, provided certain conditions are met) at a variable interest rate for a term of five years, subject to the terms and conditions set forth therein.
The Multi-Year Credit Agreement replaces EPO’s existing Revolving Credit Agreement, dated as of September 7, 2011, among EPO, Canadian Enterprise Gas Products, Ltd., the Lenders party thereto, Wells Fargo Bank National Association, as Administrative Agent, The Royal Bank of Scotland PLC, Mizuho Corporate Bank, Ltd. and The
Bank of Nova Scotia, as Co-Syndication Agents, and JPMorgan Chase Bank, N.A. and Barclays Bank PLC, as Co-Documentation Agents, as amended to date. EPO may use the proceeds from loans under the Multi-Year Credit Agreement as a backstop for commercial paper and for working capital, capital expenditures, acquisitions and other company purposes.
EPO’s obligations under the Multi-Year Credit Agreement are not secured by any collateral; however, they are guaranteed by the Partnership pursuant to a Guaranty Agreement (the “Multi-Year Guaranty Agreement”). Amounts borrowed under the Multi-Year Credit Agreement mature on September 13, 2022, although the maturity date may be extended at EPO’s request (up to two requests) for a one-year extension of the maturity date by delivering a request prior to the maturity date and with the consent of required lenders as set forth under the Multi-Year Credit Agreement.
In addition to interest payments on outstanding borrowings, on a quarterly basis, EPO is required to pay a facility fee on each lender’s commitment irrespective of commitment usage. The facility fee amount and the applicable rate spread for Eurodollar loans and alternate base rate loans will vary based on EPO’s senior debt credit rating.
The Multi-Year Credit Agreement contains customary representations, warranties, covenants (affirmative and negative) and events of default, the occurrence of which would permit the lenders to accelerate the maturity date of amounts borrowed under the Multi-Year Credit Agreement. The Multi-Year Credit Agreement also restricts EPO’s ability to pay cash distributions to the Partnership if an event of default (as defined in the Multi-Year Credit Agreement) has occurred and is continuing at the time such distribution is scheduled to be paid or would result therefrom.
The descriptions of the Multi-Year Credit Agreement and the Multi-Year Guaranty Agreement in this Item 1.01 are qualified in their entirety by reference to the full text of the Multi-Year Credit Agreement and the Multi-Year Guaranty Agreement, which are filed as Exhibits 10.3 and 10.4 hereto, respectively, and incorporated herein by reference.