| Item 1.01 | Entry into a Material Definitive Agreement. |
On June 12, 2023, Calumet Specialty Products Partners, L.P. (the “Partnership”), Calumet Finance Corp. (“Finance Corp.” and, together with the Partnership, the “Issuers”), Calumet GP, LLC (the “General Partner”) and certain subsidiary guarantors named therein (the “Guarantors”) entered into a purchase agreement (the “Purchase Agreement”) with BofA Securities, Inc. as representative of the several initial purchasers named therein (collectively, the “Initial Purchasers”), under which they agreed to sell $325 million aggregate principal amount of a new series of the Issuers’ 9.75% Senior Notes due 2028 (the “Notes”) in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. The Notes will mature on July 15, 2028 and will be issued at par for net proceeds of approximately $319.1 million, after deducting the Initial Purchasers’ discount and estimated offering expenses. The closing of the issuance of the Notes is expected to occur on June 27, 2023, subject to customary closing conditions. The Partnership intends to use the net proceeds from the offering of the Notes to fund its offers to purchase any and all of the Issuers’ outstanding $200 million in aggregate principal amount of the 9.25% Senior Secured First Lien Notes due 2024 (the “2024 Secured Notes”) and up to $100 million in aggregate principal amount of the Issuers’ outstanding 11.00% Senior Notes due 2025 (together with the 2024 Secured Notes, the “Existing Notes”) and to pay related premiums and expenses, with the remaining net proceeds to be used for general partnership purposes, including debt repayment.
Certain of the Initial Purchasers and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with the Partnership or its affiliates. The Initial Purchasers have received, or may in the future receive, customary fees and commissions for these transactions. Certain of the Initial Purchasers or their affiliates are agents and/or lenders under the Partnership’s revolving credit facility. Certain of the Initial Purchasers or their affiliates may be holders of the Existing Notes and, therefore, may receive a portion of the net proceeds from the offering of the Notes. The Partnership has also entered into, in the ordinary course of business, various derivative financial instrument transactions related to its crude oil and natural gas purchases and sales of finished fuel products, including diesel and gasoline crack spread hedges, with certain affiliates of certain of the Initial Purchasers.
The Purchase Agreement contains customary representations, warranties and agreements of the Issuers, the General Partner and the Guarantors and customary conditions to closing, indemnification rights, obligations of the parties and termination provisions.
The foregoing description of the Purchase Agreement is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which is filed as Exhibit 1.1 to this report and is incorporated herein by reference.
On June 12, 2023, the Partnership issued a press release announcing the pricing of the Notes described in Item 1.01 of this report, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
