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ALJ > SEC Filings for ALJ > Form 8-K on 30-Nov-2012All Recent SEC Filings

Show all filings for ALON USA ENERGY, INC.

Form 8-K for ALON USA ENERGY, INC.


30-Nov-2012

Entry into a Material Definitive Agreement


Item 1.01 Entry into a Material Definitive Agreement

New Term Loan Facility

On November 26, 2012, Alon USA Partners, LP (the "Partnership"), a subsidiary of Alon USA Energy, Inc. (the "Company"), closed its initial public offering (the "Offering") of the Partnership's common units. The Company used $171.1 million of the net proceeds of the Offering to reduce its $450.0 million term loan (the "Company Term Loan"). In connection with the closing of the Offering, the Partnership assumed from the Company fully drawn term loans with an aggregate principal amount of $250.0 million, governed by a term loan facility with Credit Suisse AG as administrative agent and a syndicate of financial institutions and lenders (the "New Term Loan Facility"), which loans reduced the amounts outstanding under the Company Term Loan. The New Term Loan Facility will mature on November 13, 2018.

The New Term Loan Facility is secured by a first priority lien on all of the Partnership's fixed assets and other specified property, as well as on the general partner interest in the Partnership held by Alon USA Partners GP, LLC (the "General Partner"), and a second lien on the Partnership's cash, accounts receivables, inventories and related assets. Upon entering into the New Term Loan Facility, neither the General Partner, the Partnership or any of its subsidiaries remains a guarantor of the remaining borrowings outstanding under the Company Term Loan of approximately $28.9 million and neither the General Partner's, the Partnership's or any of its subsidiaries' assets remain subject to a lien securing the borrowings outstanding under the Company Term Loan.

Borrowings under the New Term Loan Facility bear interest, at the Partnership's election, of either a rate (A) equal to the sum of (i) the London Interbank Offered Rate (LIBOR) (with a floor of 1.25% per annum) plus (ii) a margin of approximately 8.00% per annum for a per annum rate of approximately 9.25% per annum, based on current market rates or (B) the sum of (i) the Base Rate which is equal to equal to the greatest of (a) the Prime Rate in effect on such day,
(b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and
(c) the one-month LIBOR plus 1%, but in the case of either (a), (b), or (c) with a floor of 2.25% per annum; plus (ii) a margin of approximately 7.00% per annum for a per annum rate of no less than 9.25% per annum. Interest will be payable quarterly, or, at the Partnership's option, at more frequent intervals.

The New Term Loan Facility contains customary affirmative and negative covenants for transactions of this nature, including (i) customary reporting requirements;
(ii) a requirement to maintain corporate ratings from Moody's and S&P; (iii) a restriction on the Partnership's ability to (1) incur additional debt, (2) incur or permit liens to exist on its property, (3) make certain investments, acquisitions or other restricted payments, and (4) modify or terminate certain material contracts. In addition, the New Term Loan Facility provides that the General Partner's board of directors cannot modify the Partnership's cash distribution policy in a manner that is less favorable to the lenders thereunder than the current cash distribution policy. The New Term Loan Facility also contains customary default provisions. A transfer of (i) 50% or greater of equity interests in the General Partner or (ii) the general partner interest, in each case, would require approval of the lenders.

The foregoing description is qualified in its entirety by reference to the full text of the New Term Loan Facility, which is filed as Exhibit 10.1 to this Form 8-K and incorporated in this Item 1.01 by reference.

Item 9.01 Exhibits




(d) Exhibits




Exhibit Number         Description

10.1                   Credit and Guaranty Agreement, dated as of November 26, 2012,
                       among Alon USA Partners, LP, Alon USA Partners GP, LLC and
                       certain subsidiaries of Alon USA Partners, LP, as Guarantors,
                       the lenders party thereto and Credit Suisse AG, as
                       Administrative Agent and Collateral Agent.


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