Suburban Propane gets $500 million amended, restated revolver

By Mary-Katherine Stinson

Lexington, Ky., March 18 – Suburban Propane Partners, LP and wholly owned subsidiary Suburban Propane, LP amended and restated their credit agreement on Friday with Bank of America, NA as administrative agent, providing for a $500 million revolver to the partnership, according to an 8-K filing with the Securities and Exchange Commission.

Borrowings from the revolver may be made until maturity on the earlier of the date 91 days prior to maturity of the partnership’s and Suburban Energy Finance Corp.’s 5 7/8% senior notes due 2027, unless the notes have been refinanced before that date, or March 15, 2029.

At the request of the operating partnership, and subject to obtaining additional commitments from lenders, total borrowings may be increased to $850 million and may be in the form of incremental term facilities and/or increases of the revolver.

Borrowings bear interest equal to the term SOFR screen rate two business days prior to the start of the interest period plus 10 basis points plus an applicable rate ranging from 150 bps to 250 bps, based on the company’s total consolidated leverage ratio.

There are no prepayment penalties.

The obligations under the agreement are secured by liens on all or substantially all of the personal property of the partnership, the operating partnership and their subsidiaries, as well as mortgages on the Elk Grove Facility in California, the New Jersey headquarters and the Oregon tank farm.

The facility requires the consolidated interest coverage ratio as of the end of any fiscal quarter of the partnership to be not less than 2.5 to 1.0, prohibits the total consolidated leverage ratio as of the end of any fiscal quarter of the partnership from being greater than 5.75 to 1.00, and prohibits the senior secured consolidated leverage ratio as of the end of any fiscal quarter of the operating partnership from being greater than 3.25 to 1.00.

Citizens Bank, NA, JPMorgan Chase Bank, NA, Wells Fargo Bank, NA, Capital One, NA and M&T Bank are the co-syndication agents.

Cobank, ACB and HSBC Bank USA, NA are the documentation agents.

BofA Securities, Inc., Citizens Bank, JPMorgan, Wells Fargo Securities, LLC, Capital One and M&T Bank are the joint lead arrangers and joint bookrunners.

The credit agreement amends and restates the operating partnership’s third amended and restated credit agreement with Bank of America dated as of March 5, 2020, which provided for a $500 million revolver plus increases of up to $350 million. At the time of the execution of the new credit agreement, the operating partnership had borrowings under the existing credit agreement of $187.9 million under the revolver, which have been rolled into the credit agreement.

Based in Whippany, N.J., Suburban Propane supplies propane, fuel oil and related products and services and markets natural gas and electricity.

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