Delek US Holdings Simplifies Debt Structure with new $1.0 Billion Revolving Credit Facility and $700.0 Million Term Loan B
April 02 2018 - 8:00AM
Delek US Holdings, Inc. (NYSE:DK) (“Delek US”) today announced that
it has closed on a new $1.0 billion senior secured revolving ABL
credit facility (the “Revolver”) and a $700.0 million senior
secured term loan B (the “Term Loan” and together with the
Revolver, the “Facilities”). These Facilities are expected to
simplify the debt structure as they consolidate borrowings at the
Delek US Holdings, Inc. level, while reducing overall interest
expense. Proceeds from these Facilities will be used to repay
outstanding borrowings under several debt instruments and for other
corporate purposes.
Kevin Kremke, EVP and Chief Financial Officer of
Delek US remarked: “Both the Revolver and Term Loan were
oversubscribed, and we appreciate the strong support from our
lender group. This financing provides additional financial
flexibility to Delek US and simplifies our debt structure. It was
an important step to improve our cost of capital and should bring
us closer to capturing approximately $30 million of cost of capital
synergies on an annualized basis that we outlined as part of the
Alon USA transaction.”
The terms and conditions of the new $1.0 billion
Revolver include a springing compliance requirement with a minimum
fixed charge coverage ratio financial covenant if excess
availability under the revolver borrowing base is below certain
thresholds, as defined in the credit agreement. Borrowings under
this the Revolver bear interest at a rate of LIBOR plus 1.25 to
1.75 percent based on excess availability. The maturity date is
March 30, 2023. Approximately $300 million was borrowed on the
Revolver at closing of the transaction. The joint lead arrangers
and joint book runners for the Revolver were Wells Fargo Bank,
National Association, Barclays Bank PLC, Regions Capital Markets,
and SunTrust Robinson Humphrey, Inc.
The $700.0 million Term Loan carries an interest
rate of LIBOR plus 2.50 percent and matures on March 30, 2025. It
does not have any financial maintenance covenants and was fully
drawn at close. The joint lead arrangers and joint book runners for
the Term Loan were Wells Fargo Securities, LLC, Barclays Bank PLC,
Regions Capital Markets, and SunTrust Robinson Humphrey, Inc.
Wells Fargo Bank, National Association is the
administrative agent under both the Revolver and the Term Loan.
Following the close of the Revolver and Term
Loan, the remaining other borrowings outstanding include those
certain Alon Successor Notes, the Reliant Bank Revolver and the
Convertible Notes at Delek US, as well as the DKL Revolver and DKL
Notes at Delek Logistics Partners, LP, as each are defined and
further discussed in Delek US’ most recent Annual Report filed with
the SEC on Form 10-K.
About Delek US Holdings,
Inc.Delek US Holdings, Inc. is a diversified downstream
energy company with assets in petroleum refining, logistics,
asphalt, renewable fuels and convenience store retailing. The
refining assets consist of refineries operated in Tyler and Big
Spring, Texas, El Dorado, Arkansas and Krotz Springs, Louisiana
with a combined nameplate crude throughput capacity of 302,000
barrels per day.
The logistics operations consist of Delek
Logistics Partners, LP. Delek US Holdings, Inc. and its affiliates
also own approximately 63 percent (including the 2 percent general
partner interest) of Delek Logistics Partners, LP. Delek
Logistics Partners, LP (NYSE:DKL) is a growth-oriented master
limited partnership focused on owning and operating midstream
energy infrastructure assets.
The convenience store retail business is the
largest 7-Eleven licensee in the United States and operates
approximately 300 convenience stores in central and west Texas and
New Mexico.
Safe Harbor Provisions Regarding
Forward-Looking StatementsThis press release contains
forward-looking statements that are based upon current expectations
and involve a number of risks and uncertainties. Statements
concerning current estimates, expectations and projections about
future results, performance, prospects, opportunities, plans,
actions and events and other statements, concerns, or matters that
are not historical facts are “forward-looking statements,” as that
term is defined under the federal securities laws. These
forward-looking statements include, but are not limited to,
statements regarding simplification of our debt structure;
reduction of interest; use of proceeds from the Facilities;
financial flexibility; cost of capital; our ability to capture $30
million of cost of capital synergies on an annualized basis or at
all; the terms of the Facilities including interest rates and
covenants thereunder; our other debt and the terms thereof.
Investors are cautioned that the following
important factors, among others, may affect these forward-looking
statements. These factors include, but are not limited to: risks
and uncertainties related to the ability to successfully integrate
the businesses of Delek US and Alon USA Energy, Inc. ; uncertainty
related to timing and amount of future share repurchases and
dividend payments; risks and uncertainties with respect to the
quantities and costs of crude oil we are able to obtain and the
price of the refined petroleum products we ultimately sell; gains
and losses from derivative instruments; management's ability to
execute its strategy of growth through acquisitions and the
transactional risks associated with acquisitions and dispositions;
acquired assets may suffer a diminishment in fair value as a result
of which we may need to record a write-down or impairment in
carrying value of the asset; changes in the scope, costs, and/or
timing of capital and maintenance projects; operating hazards
inherent in transporting, storing and processing crude oil and
intermediate and finished petroleum products; our competitive
position and the effects of competition; the projected growth of
the industries in which we operate; general economic and business
conditions affecting the southern United States; and other risks
described in Delek US’ filings with the United States
Securities and Exchange Commission (the “SEC”).
Forward-looking statements should not be read as
a guarantee of future performance or results and will not be
accurate indications of the times at, or by, which such performance
or results will be achieved. Forward-looking information is
based on information available at the time and/or management's good
faith belief with respect to future events, and is subject to risks
and uncertainties that could cause actual performance or results to
differ materially from those expressed in the statements.
Delek US undertakes no obligation to, and will not, update or
revise any such forward-looking statements, except as required by
applicable law or regulation.
Investor / Media Relations Contact:Keith
JohnsonVice President of Investor
Relations
Delek US Holdings,
Inc.
615-435-1366
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