Item 1.01. Entry into a Material Definitive Agreement.
On October 31, 2018, EQM Midstream Partners, LP (EQM) amended and restated its existing unsecured $1,000,000,000 Second Amended and Restated Credit Agreement, dated as of July 31, 2017, among EQM, Wells Fargo Bank, National Association, as Administrative Agent, Swing Line Lender and an L/C Issuer, and the other lenders and agents parties thereto, pursuant to that certain Third Amended and Restated Credit Agreement, dated as of October 31, 2018 (the Third Amended and Restated Credit Agreement), among EQM, Wells Fargo Bank, National Association, as Administrative Agent, Swing Line Lender and an L/C Issuer, and the other lenders and agents parties thereto.
Under the Third Amended and Restated Credit Agreement, EQM may obtain loans in an aggregate principal amount not to exceed $3,000,000,000 outstanding at any time.
The Third Amended and Restated Credit Agreement matures on October 31, 2023. The Third Amended and Restated Credit Agreement has an accordion feature that allows EQM to increase the available revolving commitments under the facility by up to an additional $750,000,000, subject to satisfaction of certain conditions.
Under the terms of the Third Amended and Restated Credit Agreement, EQM can obtain Base Rate Loans (as defined in the Third Amended and Restated Credit Agreement) or Fixed Period Eurodollar Rate Loans (as defined in the Third Amended and Restated Credit Agreement) (Eurodollar Rate Loans). Base Rate Loans are denominated in dollars and bear interest at a base rate plus a margin of 0.125% to 0.875% determined on the basis of EQMs then current credit rating. Eurodollar Rate Loans bear interest at a Eurodollar Rate (as defined in the Third Amended and Restated Credit Agreement) plus a margin of 1.125% to 1.875% determined on the basis of EQMs then current credit rating. EQM may voluntarily prepay its borrowings, in whole or in part, without premium or penalty, but subject to reimbursement of funding losses with respect to prepayment of Eurodollar Rate Loans.
The proceeds of the loans made under the Third Amended and Restated Credit Agreement may be used by EQM for working capital, capital expenditures, dividends, unit repurchases, and other lawful corporate purposes.
The Third Amended and Restated Credit Agreement contains certain representations and warranties and various affirmative and negative covenants and events of default, including (i) a restriction on the ability of EQM or its subsidiaries to incur or permit liens on assets, (ii) the establishment of a maximum consolidated leverage ratio of not more than 5.00 to 1.00 (or not more than 5.50 to 1.00 for certain measurement periods following the consummation of certain acquisitions), (iii) a limitation on certain changes to EQMs business, (iv) certain restrictions related to mergers or acquisitions, (v) a restriction on the ability of EQM or its subsidiaries on making dispositions of all or substantially all of the assets of EQM or its subsidiaries; and (vi) a restriction on the ability of EQM or its subsidiaries to incur new debt, in each case subject to certain significant exceptions.
The foregoing description of the Third Amended and Restated Credit Agreement does not purport to be a complete statement of the parties rights and obligations under the Third Amended and Restated Credit Agreement and the transactions contemplated by the Third Amended and Restated Credit Agreement and is qualified in its entirety by reference to the full text of the Third Amended and Restated Credit Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated in this Item 1.01 by reference.
EQGP Holdings, LP (EQGP) has indirect control of EQM through EQGPs direct control of EQM Midstream Services, LLC, the general partner of EQM. As of October 30, 2018, EQGP owned 100% of the interests in EQM Midstream Services, LLC, which owned a 1.2% general partner interest and all of the incentive distribution rights in EQM. As of October 30, 2018, EQGP and its subsidiaries owned an approximately 17.9% limited partner interest in EQM.