NuStar restates credit agreement to extend maturity, replace Libor

By Marisa Wong

Los Angeles, Jan. 31 – NuStar Energy LP and wholly owned subsidiary NuStar Logistics, LP amended and restated on Jan. 28 NuStar Logistics’ amended and restated unsecured five-year revolving credit agreement dated Oct. 29, 2014, according to an 8-K filed Monday with the Securities and Exchange Commission.

The terms of the amended and restated credit agreement are based off the existing credit agreement, incorporating the following changes, among others:

• Extending the maturity date of the credit facility to April 27, 2025 from Oct. 27, 2023;

• Increasing maximum amount of letters of credit that can be issued under the credit agreement to $500 million from $400 million;

• Removing and replacing Libor benchmark provisions with term SOFR benchmark provisions;

• Removing the 0.50x increase permitted in the company’s consolidated debt coverage ratio for some rolling periods in which an acquisition for aggregate net consideration of at least $50 million occurs; and

• Introducing baskets and exceptions to some negative covenants, including the negative covenants restricting other indebtedness, liens, investments, restricted payments and transactions with affiliates.

Consistent with the existing credit agreement, the restated credit agreement has an aggregate borrowing capacity of up to $1 billion.

Borrowings bear interest at a rate based on term SOFR and a spread that varies depending on credit ratings. The spread ranges from 135 basis points to 275 bps.

The commitment fee, also based on ratings, ranges from 25 bps to 55 bps.

NuStar Logistics’ obligations under the credit agreement are guaranteed by NuStar Energy and another wholly owned subsidiary, NuStar Pipeline Operating Partnership LP.

As of the closing date, NuStar Logistics had $140 million of borrowings and $4.7 million of letters of credit outstanding.

Wells Fargo Bank, NA is administrative agent.

Wells Fargo Securities, LLC, Truist Securities, Inc., Mizuho Bank, Ltd., PNC Capital Markets LLC, MUFG Bank, Ltd., Sumitomo Mitsui Banking Corp., TD Securities (USA) LLC, Bank of Nova Scotia and Bank of America Securities, Inc. are the joint bookrunners and joint lead arrangers.

Truist Bank, Mizuho Bank and PNC Bank, NA are co-syndication agents.

MUFG Bank, Sumitomo Mitsui, Scotiabank, Toronto-Dominion Bank, New York Branch and Bank of America, NA are co-documentation agents.

Also on Jan. 28, NuStar Energy entered into a sixth amendment to the receivables financing agreement dated June 15, 2015 with NuStar Finance LLC as borrower, NuStar Energy as initial servicer and PNC Bank as administrative agent.

The amendment to the receivables financing agreement extends the scheduled termination date to Jan. 31, 2025 from Sept. 20, 2023, reduces the floor rate in the calculation of borrowing rates and replaces Libor provisions with SOFR provisions.

NuStar is a liquids terminal and pipeline operator based in San Antonio.

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