Marathon Petroleum gets $1 billion 364-day revolving credit facility

By Angela McDaniels

Tacoma, Wash., Aug. 1 – Marathon Petroleum Corp. entered into a $1 billion 364-day revolving credit agreement on July 26, according to an 8-K filing with the Securities and Exchange Commission.

The interest rate is Libor plus a margin that ranges from 112.5 basis points to 150 bps, depending on the company’s credit ratings. The current margin is 125 bps.

Commitment fees ranging from 10 bps to 17.5 bps (currently 12.5 bps) accrue on the unused commitments.

The credit agreement has a covenant that requires Marathon Petroleum to maintain a ratio of consolidated net debt to total capitalization not to exceed 65%.

The availability of the lending commitments under the new credit agreement is contingent upon customary conditions, including the payment of all amounts outstanding and the termination of the lending commitments under Marathon Petroleum’s existing 364-day revolving credit facility.

The availability date is expected to occur on or about Sept. 30 in connection with the expiration of Marathon Petroleum’s existing 364-day revolver.

If the availability date does not occur by Oct. 1, the commitments of the lenders under the new credit agreement will automatically terminate.

JPMorgan Chase Bank, NA is the administrative agent. JPMorgan Chase Bank, Wells Fargo Securities, LLC, Barclays Bank plc, BofA Securities, Inc., Citibank, NA, Mizuho Bank, Ltd., MUFG Bank, Ltd. and Royal Bank of Canada are the joint lead arrangers and joint bookrunners. Wells Fargo Bank, NA is the syndication agent. Bank of America, NA, Barclays Bank, Citibank, Mizuho Bank, MUFG Bank and RBC are documentation agents.

The new credit agreement was entered into shortly before MPLX LP completed its acquisition of Andeavor Logistics LP on Tuesday. Marathon Petroleum controls MPLX.

Marathon Petroleum is a crude oil refiner based in Findlay, Ohio. Andeavor is a San Antonio-based marketing, logistics and refining company. MPLX is a Findlay, Ohio-based owner, operator and developer of crude oil pipeline and midstream assets.

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