SemGroup and Rose Rock amend credit agreements to allow investments

By Marisa Wong

Madison, Wis., Oct. 2 - Rose Rock Midstream, LP, a limited partnership formed by SemGroup Corp., amended its credit agreement dated Nov. 10, 2011 with Royal Bank of Scotland plc as administrative agent, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

Rose Rock amended its credit agreement on Sept. 26 to

• Increase incremental revolving commitments by $200 million to an aggregate amount of up to $400 million;

• Permit the investment in equity interests of SemCrude Pipeline, LLC in one or more transactions;

• Provided that the partnership has acquired equity interests of SemCrude Pipeline, permit up to $71 million of investments in SemCrude Pipeline for contribution to White Cliffs Pipeline, LLC for the purposes of funding certain planned expansion projects by White Cliffs;

• Permit additional investments not otherwise permitted of up to the greater of $40 million and 10% of consolidated net tangible assets plus any return of capital received by the partnership for previous investments; and

• Include a negative pledge on White Cliffs.

Concurrently, SemGroup entered into a fifth amendment to its credit agreement dated June 17, 2011 with Royal Bank of Scotland as administrative agent, according to the 8-K filing.

SemGroup's agreement was amended to

• Permit additional investments of up to $332 million in various pipeline projects;

• Permit additional investments not otherwise allowed in an aggregate amount not exceeding the greater of $100 million and 10% of consolidated net tangible assets plus any return of capital from previous investments;

• Include a negative pledge on White Cliffs;

• With respect to master limited partnership drop-downs, remove the requirement of delivery of a fairness opinion and remove all limitations related to percentages of assets; and

• Permit other restricted payments not exceeding the company's available cash so long as there is no default or event of default arising from such payments and the leverage ratio does not exceed 4 to 1.

SemGroup is a midstream service company. Rose Rock is engaged in the business of crude oil gathering, transportation, storage and marketing in Colorado, Kansas, Montana, North Dakota, Oklahoma and Texas. Both companies are based in Tulsa, Okla.

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