Murphy Oil USA amends, restates $650 million ABL, term loan agreement

By Wendy Van Sickle

Columbus, Ohio, March 16 – Murphy USA Inc. subsidiary Murphy Oil USA, Inc. amended and restated its credit agreement on March 10 providing for an up to $450 million asset-based revolving facility and a $200 million term loan facility, according to an 8-K filing with the Securities and Exchange Commission.

The five-year ABL facility includes a $200 million sublimit for letters of credit and a $150 million accordion feature. It may be extended by request with the lenders’ consent.

The term loan matures in four years.

The interest rate for the ABL facility is Libor plus 150 basis points to 200 bps, depending on leverage. The interest rate for the term loan is Libor plus 250 bps to 275 bps, also depending on leverage.

J.P. Morgan Securities LLC and Regions Business Capital are the lead arrangers and bookrunners. JPMorgan Chase Bank, NA is the administrative agent. Regions Bank is the syndication agent. Fifth Third Bank, Royal Bank of Canada, U.S. Bank NA and Wells Fargo Bank, NA are the documentation agents.

Beginning in July, Murphy make quarterly principal payments of $10 million on the term loan.

Borrowings under the credit facilities are prepayable without premium or penalty. The borrower is required to prepay the term loan with the net cash proceeds of certain asset sales or casualty events, subject to some exceptions. The credit agreement also includes some customary mandatory prepayment provisions for to the ABL facility.

The credit agreement requires Murphy Oil, Murphy USA and certain subsidiaries to maintain a minimum fixed charge coverage ratio of 1 time when availability for at least three consecutive business days is less than the greater of (a) 17.5% of the lesser of the aggregate ABL facility commitments and the borrowing base and (b) $70 million (including as of the most recent fiscal quarter end on the first date when availability is less than such amount). It must also maintain a maximum secured debt-to-EBITDA ratio of 4.5 times.

At closing, the company borrowed $200 million under the facilities. Proceeds were used, in part, to repay term loans outstanding under Murphy’s term credit agreement dated Feb. 5 with JPMorgan Chase as administrative agent. Proceeds will also be used for working capital and other general corporate purposes.

Murphy USA, based in El Dorado, Ark., operates a chain of national gas stations and convenience stores.

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