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OILT > SEC Filings for OILT > Form 8-K on 26-Jun-2013All Recent SEC Filings

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Form 8-K for OILTANKING PARTNERS, L.P.


26-Jun-2013

Entry into a Material Definitive Agreement, Creation of a Direct Financ


Item 1.01 Entry into a Material Definitive Agreement. Loan Agreement

On June 26, 2013, Oiltanking Houston, L.P. ("OTH"), a wholly owned subsidiary of Oiltanking Partners, L.P. (the "Partnership"), entered into a Loan Agreement by and between OTH, as borrower, and Oiltanking Finance B.V., as lender (the "Lender"), effective May 31, 2013 (the "Loan Agreement"). The Loan Agreement is a $50 million credit facility for the purpose of financing fixed assets, through which borrowings are available from May 31, 2013 through August 31, 2013 (the "Availability Period"), with a final maturity date of June 30, 2023 (the "Maturity Date"). At the end of the Availability Period, any unused amounts under the credit facility will be canceled.

During the Availability Period, interest on borrowings outstanding under the Loan Agreement will be calculated on the basis of an annual interest rate determined by the Lender in its sole discretion, which represents the Lender's cost of funds during the Availability Period, plus a margin of 2.60% per annum. After the end of the Availability Period and through the Maturity Date, interest will be calculated on the basis of the USD swap rate for ten years, including the costs of funds that the Lender has incurred, plus a margin of 2.60% per annum. During the Availability Period, interest is payable at the end of the Availability Period. After the Availability Period, interest payments are payable semi-annually, beginning on December 30, 2013. An arrangement fee of $225,000 became payable to the Lender by OTH upon signing of the Loan Agreement.

The Loan Agreement requires OTH to maintain certain Financial Parameters, including: (i) a ratio of Stockholders' Equity to non-current assets of 30% or greater, (ii) a ratio of EBITDA to Total Debt Service of 1.2 or greater, and
(iii) a ratio of Net Financial Indebtedness to EBITDA of 3.75 or less, as such terms are described in the Loan Agreement. The Loan Agreement also contains covenants restricting the ability of OTH to take certain actions without the consent of the Lender, including: (i) incurring additional indebtedness, (ii) pledging its assets, or (iii) amending its organizational documents. The Loan Agreement contains customary borrowing conditions and events of default, including events of default triggered by: (i) OTH failing to satisfy the Financial Parameters and other covenants described in this paragraph, (ii) OTH failing to repay borrowings under the Loan Agreement when they become due, and
(iii) OTH ceasing to be controlled by Oiltanking GmbH. If an event of default is outstanding, the Lender may cancel commitments under the Loan Agreement and may declare any amounts outstanding under the Loan Agreement immediately due and payable.

We expect to use the proceeds from the Loan Agreement to repay outstanding borrowings under the Partnership's unsecured revolving line of credit agreement with Oiltanking Finance B.V.

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

Relationships

The Lender is a wholly owned finance company of Oiltanking GmbH that serves as a lender for Oiltanking GmbH and its subsidiaries. Affiliates of Oiltanking GmbH own the general partner of the Partnership and 70.4% of all of the Partnership's outstanding limited partner interests. In addition, the general partner of the Partnership owns a 2.0% general partner interest, represented by 793,874 notional general partner units.



Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 above is incorporated into this Item 2.03 by reference.




Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
10.1 Loan Agreement by and between Oiltanking Houston, L.P. as Borrower and Oiltanking Finance B.V. as Lender, effective as of May 31, 2013.


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