Item 1.01 Entry into a Material Definitive Agreement.
On March 8, 2021 (the "Closing Date"), Summit Permian Transmission, LLC
("Permian Transmission"), an unrestricted subsidiary of Summit Midstream
Partners, LP ("SMLP") that directly owns SMLP's 70% interest in Double E
Pipeline, LLC ("Double E"), entered into a Credit Agreement with ING Capital
LLC, Mizuho Bank, Ltd. and MUFG Union Bank, N.A. (the "Credit Agreement").
The Credit Agreement provides Permian Transmission with $175.0 million of senior
secured credit facilities (the "Credit Facilities"), including a $160.0 million
Term Loan Facility (the "Term Loan Facility") and a $15.0 million Working
Capital Facility (the "Working Capital Facility"). The Credit Facilities can be
used to finance Permian Transmission's capital calls associated with its
investment in Double E, debt service and other general corporate purposes. The
Credit Facilities mature on the earlier of (i) the sixth anniversary of the term
conversion date and (ii) seven years after the initial funding date, which
occurred on the Closing Date. The term conversion date will occur upon
satisfaction of customary conditions, including bringing the Double E project
into service under its transportation agreements.
During construction of the Double E project, the Credit Facilities will be drawn
on an as-needed basis, so long as there are no defaults, events of default, no
event that has had a material adverse effect on Permian Transmission or Double E
and certification is provided that Permian Transmission has sufficient funds to
satisfy the capital call requirements necessary to complete the Double E project
and that the Double E project is on schedule. Permian Transmission is required
to fund a minimum equity contribution amount of approximately $145.0 million,
which was supported at closing with Permian Transmission's existing investment
in Double E and a $16.0 million letter of credit issued under SMLP's existing
revolving credit facility.
The Credit Facilities include customary representations and warranties,
affirmative covenants, negative covenants, and events of default with customary
cure periods, knowledge qualifiers and materiality qualifiers. Events of default
include non-payment of principal and interest, noncompliance with affirmative
and negative covenants, inaccuracy of representations and warranties, not
achieving term conversion by a specified date, termination of material
contracts, revocation of material permits and other customary events of default.
Permian Transmission is required to take all actions, within its control, to
comply with any such covenants that apply to Double E. Secured interests in the
equity and assets of Permian Transmission, including its 70% direct membership
interest in Double E, have been granted under the Credit Facilities.
Upon term conversion, the Credit Facilities will amortize based on a 10-year
sculpted amortization schedule. Permian Transmission will also be required to
maintain a 6-month debt service reserve, which can be supported by letters of
credit issued under the Working Capital Facility. In addition, the Credit
Facilities allow for restricted payments so long as there are no defaults or
events of default, Permian Transmission maintains a 1.20x debt service coverage
ratio and complies with the debt service reserve requirements and there is no
breach of a material contract that would have a material adverse effect on
distributions to Permian Transmission.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The description of the credit facilities set forth under Item 1.01 above is
incorporated into this Item 2.03 by reference.
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