Sprague Resources LP - 10-K filing on 2016-03-10

Debt

12 Months Ended

Dec. 31, 2015



11.	Debt



	As of December 31,
	2015		2014
Current debt
Credit agreement	$	332,703	$	396,961
Other	211		253
Current debt	332,914		397,214
Long-term debt
Credit agreement	283,197		417,789
Other	364		567
Long-term debt	283,561		418,356
Total debt	$	616,475	$	815,570

Credit Agreement

On December 9, 2014, in connection with the acquisition of Kildair, the Partnership entered into an amended and restated revolving credit agreement (the “Credit Agreement”) that will mature on December 9, 2019. Obligations under the Credit Agreement are secured by substantially all of the assets of the Partnership and its subsidiaries. The revolving credit facilities under the Credit Agreement in effect as of December 31, 2015 contain, among other items, the following:


•	A U.S. dollar revolving working capital facility of up to $1.0 billion to be used for working capital loans and letters of credit in the principal amount equal to the lesser of Sprague’s borrowing base and $1.0 billion;


•	A multicurrency revolving working capital facility of up to $120.0 million to be used by Sprague’s Canadian subsidiaries for working capital loans and letters of credit in the principal amount equal to the lesser of Kildair’ s borrowing base and $120.0 million.


•	A revolving acquisition facility of up to $400.0 million to be used for loans and letters of credit to fund capital expenditures and acquisitions and other general corporate purposes related to Sprague’s current businesses; and,


•	Subject to certain conditions, the U.S. dollar or multicurrency revolving working capital facilities may be increased by $200.0 million. Additionally, subject to certain conditions, the revolving acquisition facility may be increased by $200.0 million.

On March 10, 2016, the Partnership entered into an agreement to amend its Credit Agreement to increase the revolving acquisition facility to $550.0 million and make other modifications. See Note 23.

Indebtedness under the Credit Agreement will bear interest, at the Partnership’s option, at a rate per annum equal to either the Eurocurrency Base Rate (which is the LIBOR Rate for loans denominated in U.S. dollars and CDOR for loans denominated in Canadian dollars, in each case adjusted for certain regulatory costs) for interest periods of one, two, three or six months plus a specified margin or an alternate rate plus a specified margin.

For the U.S. dollar working capital facility and the acquisition facility, the alternate rate is the Base Rate which is the higher of (a) the U.S. Prime Rate as in effect from time to time, (b) the Federal Funds rate as in effect from time to time plus 0.50% and (c) the one-month Eurocurrency Rate for U.S. dollars as in effect from time to time plus 1.00%.

For the Canadian dollar working capital facility, the alternate rate is the Prime Rate which is the higher of (a) the Canadian Prime Rate as in effect from time to time and (b) the one-month Eurocurrency Rate for U.S. dollars as in effect from time to time plus 1.00%.

As of December 31, 2015 and 2014, working capital facilities borrowings were $332.5 million and $503.2 million, respectively, and outstanding letters of credit were $23.6 million and $120.2 million, respectively. The working capital facilities are subject to borrowing base reporting and as of December 31, 2015 and 2014, had a borrowing base of $542.6 million and $843.3 million, respectively. As of December 31, 2015, excess availability under the working capital facility was $186.5 million.

As of December 31, 2015 and 2014, acquisition line borrowings were $283.4 million and $311.6 million, respectively. As of December 31, 2015, excess availability under the acquisition facility was $116.6 million.

The weighted average interest rate at December 31, 2015 and 2014 was 2.9% and 2.8%, respectively. No amounts are due under the Credit Agreement until the maturity date, however, the current portion of the credit agreement at December 31, 2015 and 2014 represents the amounts intended to be repaid during the following twelve month period.

The Credit Agreement contains certain restrictions and covenants among which are a minimum level of net working capital, fixed charge coverage and debt leverage ratios and limitations on the incurrence of indebtedness. The Credit Agreement limits the Partnership’s ability to make distributions in the event of defaults as defined in the Credit Agreement. As of December 31, 2015, the Partnership is in compliance with these financial covenants.