Item 1.01
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Entry into a Material Definitive Agreement
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On December 12, 2017, Par Pacific
Holdings, Inc. (the
Company
), its wholly-owned subsidiaries Par Petroleum, LLC (
Par Petroleum
) and Par Petroleum Finance Corp. (
Finance Corp
. and together with Par
Petroleum, the
Issuers
), and Par Petroleums existing subsidiaries (other than Finance Corp.) (the
Subsidiary Guarantors
) entered into a Purchase Agreement (the
Purchase
Agreement
) with Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the several Initial Purchasers named therein (collectively, the
Purchasers
), under which the Issuers agreed to
sell $300 million in aggregate principal amount of 7.750% Senior Secured Notes due 2025 (the
Notes
) in a private placement to qualified institutional buyers pursuant to Rule 144A and to certain persons outside of the
United States pursuant to Regulation S, each under the Securities Act of 1933, as amended (the
Securities Act
). The Notes will be issued pursuant to an indenture to be entered into among the Company, the Issuers, the
Subsidiary Guarantors and Wilmington Trust, National Association, as trustee and collateral trustee.
The sale of the Notes to the
Purchasers is expected to settle on December 21, 2017, subject to customary closing conditions, and is expected to result in approximately $291.5 million in net proceeds to the Issuers after deducting the Purchasers discount and
estimated offering expenses payable by the Issuers.
The Issuers intend to use the net proceeds of the offering (i) to repay existing
indebtedness under Par Petroleums and its subsidiaries existing secured credit facilities, (ii) to repay the forward sale amount under the supply and offtake agreements with J. Aron & Company LLC, and (iii) for general
corporate purposes.
The Notes will be secured, senior obligations of the Issuers and will bear interest at a rate of 7.750% per year.
Interest will be payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2018. The Notes will mature on December 15, 2025, unless earlier repurchased or redeemed.
The Notes will be guaranteed on a senior secured basis by the Subsidiary Guarantors and on a senior unsecured basis only as to the payment of
principal and interest by the Company. The Notes will initially be secured by a first-priority lien on substantially all of the assets of the Issuers and the Subsidiary Guarantors other than certain excluded properties, the assets constituting
collateral for the supply and offtake agreements with J. Aron & Company LLC and the assets constituting collateral for a new asset-based secured revolving credit facility, which Par Petroleum and its subsidiaries expect to enter into in
connection with the settlement of the sale of the Notes.
Pursuant to the Purchase Agreement, the Company, the Issuers and the Subsidiary
Guarantors have agreed to indemnify the Purchasers against certain liabilities, including liabilities under the Securities Act.
The
foregoing description of the Purchase Agreement is not complete and is qualified by reference to the complete document, which is filed as Exhibit 1.1 to this Current Report on Form
8-K,
and is incorporated
herein by reference.