Southcross Energy amends borrowing limit under credit agreement

By Marisa Wong

Madison, Wis., March 28 - Southcross Energy Partners, LP entered into an amendment to its second amended and restated credit agreement dated Nov. 7, 2012 with Wells Fargo Bank, NA, as administrative agent, according to an 8-K filed Thursday with the Securities and Exchange Commission.

The amendment, completed on March 27, reduces the amount of letters of credit Southcross may issue from $75 million to an amount equal to $31.5 million plus any incremental cash deposited by Southcross' general partner, Southcross Energy Partners GP, LLC, into a special cash collateral account held by Wells Fargo in excess of $10 million.

In addition, the amount Southcross may borrow under the amended credit agreement is limited by an availability block of an amount equal to $100 million less (i) the amount on deposit in the GP collateral account and (ii) the amount of outstanding letters of credit.

Under the amendment

• Southcross is allowed to pay its quarterly cash distribution of available cash for the first fiscal quarter of 2013 in an amount not to exceed the amount then on deposit in the GP collateral account, even if the partnership is in default of the financial covenants contained in the credit agreement for the period ending March 31;

• The partnership may continue to make borrowings under the credit agreement prior to May 15, even if it is in default of the financial covenants for the period ending March 31; and

• The financial reporting covenant was changed to allow for delivery no later than April 30 and for a qualification of the audit opinion delivered with respect to the partnership's Dec. 31 financial statements relating to the partnership's financial covenants for the period ending March 31.

Southcross Energy is a Dallas-based natural gas company.

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